Ely Area Capacity Enhancements Programme

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Strategic Outline Business Case (Refresh of 2016 Interim SOBC)

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Disclaimer In issuing this document for its stated purpose, the Network Rail EACE Programme makes no warranty, express or implied, that compliance with all or any documents it issues is sufficient on its own to ensure safe system of work or operation. Users are reminded of their own duties under health and safety legislation.

All references made within this document were considered correct at time of approval. Supply Copies of this document are available electronically via Network Rail System Operator only Control This document shall be deemed uncontrolled once printed. This document is applicable to: Ely Area Capacity Enhancement Programme and all its associated packages including any Level Crossing design assessment, feasibility and option development work. Version History Date Version Amendments and summary of changes 08 Sep 2016 0.1 Initial draft 22 Sep 2016 0.2 Second draft 28 Sep 2016 0.3 Amendments to the Strategic, Economic and Management Cases 05 Oct 2016 0.4 Further amendments to the Strategic and Economic Cases 11 Oct 2016 0.5 Amendments following comments from the DfT and inclusion of Appendices 13 Oct 2016 1.0 Final amendments & issue to LEPs Updates from GRIP 2 discovery design phase & alignment with DfT new 04 May 2018 1.1 RNEP processes

13/06/18 1.2 Issued to Sponsor for input

09/10/18 1.3 Updated to include Level Crossing Strategy Ref: v. 1 August 2018

04/01/19 2.0 Working Draft (without strategic case) issued to DfT for review

14/01/19 2.1 Strategic Case update incorporated

15/01/19 2.2 Working Draft issued to DfT for review and guidance

General Notes

Abbreviations & Glossary

Abbreviation or Meaning Phrase IP Infrastructure Projects (Anglia) DfT Department for Transport SOBC Strategic Outline Business Case OBC Outline Business Case FBC Full Business Case LDE Lead Design Engineer WITA Wider Economic Impacts Assessments WEI Wider Economic Impacts IDF DfT’s Investment Decision Framework MEC’s DfT’s Marginal External Costs AXIAT Level Crossing Economic Impact Model LEP Local Enterprise Partnership NR Network Rail GRIP Governance for Railway Investment Projects ALCRM All Level Crossings Risk Model ORR Office of Rail and Road EACE Ely Area Capacity Enhancement (Programme) MoU Memorandum of Understanding MOIRA Timetable Management Tool LCST Level Crossing Safety Team BCR Benefit Cost Ratio IPA Infrastructure Projects Authority CSF(s) Critical Success Factor(s) RNEP Rail Network Enhancements Pipeline AHB Automatic Half Barrier WAML West Anglia Main Line ECML East Coast Main Line TPH Trains Per Hour ALARP As Low as Is Reasonably Practicable

Contents

Introduction ...... 3 Overview ...... 3 The scheme ...... 3 Background and Context ...... 4

Executive Summary ...... 6

Strategic Case ...... 8 Purpose ...... 8 Business Strategy ...... 8 The case for change ...... 9 The Problem ...... 11 Why Ely (and Haughley), & Why Now? ...... 13 Other rail freight benefactors of EACE ...... 15 Geographical and local Context ...... 15 Housing ...... 17 Exploring the options and strategic alternatives ...... 19 Meeting the strategic objectives ...... 23 What the are interdependencies ...... 24 Stakeholders support for the scheme ...... 25

ECONOMIC CASE ...... 26 ADD PURPOSE and check all the numbering and cross referencing 26 Scheme Options ...... 26

This section summarises scheme options and the Base Case. Section D.03 addresses appraisal assumptions and methodology. Section D.04 presents the sensitivity analysis and risks. Section D.05 presents conclusions...... 26 Scheme options and the Base Case - This section presents the scheme options and the Base Case in turn, and then summarises them in a table...... 26

 An increase in off-peak frequency between Ely and Kings Lynn from 1 tph to 2 tph, by extending a Kings Cross to Ely service. 27 Appraisal results 40

Sensitivity analysis and risks 41 Appraisal risks 42 Conclusions on economic case ...... 43

Financial Case ...... 44 ADD PURPOSE 44 Order of Magnitude/ GRIP 1 Estimate ...... 44 E.02 Lifecycle Costing 44

Commercial Case ...... 45 ADD PURPOSE 45 Commercial viability of the scheme ...... 45 Procurement Strategy 46 Governance and Investment 48

Management Case ...... 50 ADD PURPOSE 50 Governance 50 Assurance Plan 51 Programme Dependencies 52 Stakeholder Management and Communication ...... 54

Introduction

Overview The purpose of this appraisal is to advise the Local Enterprise Partnership, the Combined Authority and the DfT on the level of infrastructure intervention(s) required at Ely and the surrounding area to meet current growth forecasts to support short term rail growth.

This document submission looks to outline the outcomes of early development work which has been undertaken since the interim SOBC (2016) development funding was granted by the Local Enterprise Partnership. Due to the funding stream availability, the SOBC has now been updated to include an Economic Case, including a value for money assessment and Benefit Cost Ratio. Unlike the interim SOBC submitted in 2016, which focussed primarily on the strategic case, this SOBC submission looks to provide an update to all the cases including the previously issued strategic case.

An OBC is being developed for Ely Area Capacity Enhancement programme which is aiming for submission in 2019. The OBC is looking to be integrated business case for Rail, Road and Level Crossing interventions.

The study area and rail lines in consideration for the Ely Area Capacity Enhancement (EACE) Programme is as follows:

Figure A:1 Study Areas and Rail Lines

The scheme The Ely Area Capacity Enhancement (EACE) Programme is a portfolio of work identified in response to the finding of Network Rail’s Anglia Route Study, published in 2016. The Anglia Route Study confirms the need for an extensive infrastructure enhancement programme to upgrade the rail network in the Ely Area with the aim of facilitating increased freight services from Felixstowe, additional services between London Kings cross and King’s Lynn, increased regional services from Ipswich to Peterborough and Cambridge, Norwich to Cambridge and increased inter-regional

services to and from the Midlands and beyond. The overall scheme aims to develop options which can deliver the capacity for at least 11tph (8tph passenger, 3tph freight) through the Ely area. There are 117 level crossings that will be affected principally by the increase in safety risk at the level crossings by these proposed improvements in the Ely Area and the lines that connect to it.

The area is a significant railway interchange on the Anglia Network which is currently running at below optimal capacity for both frieght and passenger services in the region. It links the West Anglia Main Line from London to Kings Lynn with the cross-country route from Felixstowe to Peterborough. No fewer than five railway lines converge in the Ely area (which can be seen in the below figure):

Figure A:2 Rail lines converging at Ely

Several interventions are required to form the overall scheme. These include a series of works on rail, road and level crossings. At the time of that this business case was being prepared, a single option was not available for all the components of the scheme.

Background and Context The doubling of Ely North Junction was originally committed to be developed in CP5 as a standalone scheme. However, the decision was taken in conjunction with Sir Peter Hendy’s Enhancements Deliverability Review in autumn 2015 to defer it to CP6. This was coupled with the fact that, in isolation and without associated enhancements such as level crossings, the scheme would not deliver any capacity uplift through the Ely area. A second outcome of the Hendy Review was the withdrawal of the CP6 Development fund, previously available to commence development work on schemes deemed significant per route. Even if funding is granted for this scheme, this is not likely to become available before the beginning of year 1 CP6. This means that no design work would commence before 2020, inevitably pushing a possible delivery date even further away into late CP6 or CP7 (subject to further funding and access availability), by which time the Ely area will have curtailed significant forecast growth on the corridor as evidenced by the information provided by councils and operators detailed further on.

The sooner the scheme is developed into to GRIP 4 and beyond, the sooner the deliverability and constructability strategies produced during feasibility would assist in initiating the discussions on access provision with the operators and would give more time to put in mitigation strategies and secure the access ahead of other competing projects in the region. In adidition to this, the scheme is going to require a Transport Works Order Act (TWAO), if not a DCO as the appropriate consent order to ensure the scheme can be delivered. Design of these stages is subject to RNEP Desgn to Design Funding perameters. Needless to say, any increase in the level of service over the Ely area without major interventions to improve the capability of the infrastructure would negatively impact on reliability, safety and performance and would be unachievable (e.g. an additional off-peak Kings Lynn service above current levels). It should also be noted that the level crossings (c.117) identified as being part of the overall scheme have found through development works that no further trains can pass through the level crossings due to safety thresholds but also due to signalling constrainsts in the area.

Executive Summary Strategic Case

This growth and investment presents an opportunity for the rail freight industry, and for the country, to take advantage of the economic and environmental benefits of transporting good by rail. However, capacity constraints that exist on the rail network mean that additional freight trains cannot be accommodated on the current infrastructure, creating a barrier to realising this opportunity. The need to address these capacity constraints forms the basis of the ‘case for change’. The majority of rail freight from the Port of Felixstowe is destined for the West Midlands, the East Midlands, Yorkshire, North West England and the Central Belt in Scotland. To reach these locations, rail freight uses one of two routes: via the Great Eastern Main Line (GEML) and London to the main lines that radiate north, or via the ‘cross country’ route through Ely, Peterborough and Leicester. The route via London is intensively used by both passenger and freight services and is already operating at capacity. Not only does it carry traffic from Felixstowe, but also from the Essex Thamside corridor, itself home to two of Britain’s busiest ports in Tilbury and London Gateway. Unlike traffic from Felixstowe, freight trains from Essex Thameside have no alternative but to use the cross-London route. This, coupled with the need to increase the frequency of the London Overground passenger trains severely limits the scope for this route to also accommodate the growth in freight traffic from Felixstowe. Because of the constraints on the route via London, the rail industry’s long term strategy has been to focus on the cross country route as the principal growth corridor for rail freight traffic generated by Felixstowe. This has led to the establishment of the ‘Felixstowe to West Midlands & the North’ (F2WM&N) programme, a collection of enhancement schemes to boost capacity and capability of this corridor. It forms one of the key arteries of the Strategic Freight Network and represents huge strategic importance to the rail freight industry. The Freight Network Study (FNS, published by Network Rail in 2017) identified F2WM&N as the number one priority corridor for rail freight investment, a notion that is strongly supported by industry stakeholders. Economic Case

Taking account of the initial capital costs, renewal costs and the freight and passenger benefits, Option S1 has a Benefit Cost Ratio (BCR) of 0.9. This represents poor value for money, using DfT criteria. The Net Present Value (NPV) is -£39m. Option S2 has a BCR of 0.7. This also represents poor value for money and the NPV is -£148m. Financial Case

The Cost Range for the programme is from £600,000,000 (P50) to £870,000,000 (P90). The value for Investment Authority and Business Planning purposes is based on the 80% probability value (P80) and is £650,000,000 to £820,000,000. Commercial Case

Current indications based on GRIP 1 development work show delivery of the scheme to commence in 2014 and entry into service 2016. It is recommended that the scheme is competitively tendered to mitigate any risks which it would absorb if the Network Rail CP6 framework was used.

The programme packages and their associated commercial strategy in Development

Management Case

Subject to a commercial strategy being accepted for the scheme, the affordability aspects continue to be a constraint. Recommendation that significant integration activities are required for the scheme to be success. The costs of these integration activities are to be developed and sought through a series of business cases or through (a yet to designed) governance arrangement with the DfT that allows the scheme to continue development in parallel packages without repeated stand-down periods.

Strategic Case The purpose of the Strategic Case is to demonstrate the need for the scheme. It considers the ‘case for change’, including expected wider economic impacts, the policy context, the scheme objectives, alternative options to meet the objectives, and key influences on the preferred scheme option.

Purpose The strategic case for Ely Area Capacity Enhancement (EACE) Programme sets out the synergies of the Ely rail area with significant freight growth between the port of Felixstowe and Nuneaton and why investment is required to support future growth on the Felixstowe to West Midlands & the North F2WM&N programme as well UK PLC growth within the Anglia region support of industrial, innovation (R&D) and people growth.

Following the outcome of the Hendy review, EACE has been structured to take account of the recommendations made. The programme is acutely aware of the constraints surrounding the infrastructure, the environmental risks and the access difficulties that delivery will create. Through the development work achieved to date, plus any findings from previous studies (the programme is at GRIP 2, feasibility), EACE is ready to proceed onto the next decision point, Decision to Design, which for this programme will be part of GRIP stage 3 and GRIP stage 4.

There are some 840 level crossings in the Anglia region, of which 117 have formed part the development works of the programme. The findings have been found to influence the growth capability of the region, in that without some intervention at the crossings, the route is unable to accommodate any further train paths. This is relative to safety on the rail corridor but also the road network growth that the region is seeing. The strategic case seeks to outline the growth aspirations and the limitations on the current road and rail network plus, outline the need for change.

The following sections look to discuss these points in greater detail.

Business Strategy The government has a vision for generating strong industrial growth by enabling UK PLC to utilise rail corridors for business purposes. Ely Area Capacity Enhancement programme offers support towards the governments Industrial Strategy1 to generate long-term plans to boost the productivity and earning power of people throughout the UK.

The governments paper, Industrial Strategy: building a Britain fit for the future, sets out the following vision:

1 Industrial Strategy: Building A Britain fit for the future, November 2017

 Continued growth the national infrastructure and construction pipeline within the UK  Generating growth in housing and associated connectivity  increased growth in inward investment and trade to the UK through its Ports  Supporting the governments Road to Zero Strategy 20182

The significance of the Ely area in relation to the movement of freight in Great Britain arises from its proximity to the Port of Felixstowe and its location on the most direct rail route between the port and the East and West Coast Main Lines. Felixstowe is Britain’s busiest container port, handling 4 million twenty-foot equivalent units (TEUs) every year3, and accounting for 42 per cent of the country’s containerised trade4. Containers handled at Felixstowe are transported to and from the port by a mixture of road and rail, with the largest flows focused towards the main centres of population and industry. The short distance from Felixstowe to Greater London and the other population centres in the South East mean that road haulage is the favoured mode for these flows. However, for the conurbations in the West of England, South Wales, the Midlands, the North of England and the Central Belt of Scotland, rail represents an economically competitive means of transporting freight over the distances involved, and brings with it significant benefits in terms of decongestion and reduced emissions when compared with the road alternative, as explored further in the economic case. Around 70 per cent of containers handled at Felixstowe are delivered to destinations in a broad region passing north-westwards through the Midlands, encompassing Manchester and Liverpool as well as West and South Yorkshire3. This generates demand for all modes, and illustrates the scale of the opportunity for rail freight to be further developed throughout this corridor as a sustainable way to accommodate this demand.

The ‘deep-sea’ container (intermodal) market, which involves containers shipped from around the globe, makes up the majority of the Port of Felixstowe’s business and is set to grow significantly over the coming decades. In response, the port is investing in its facilities, with capacity for up to 6 million TEUs targeted by 2020 as well as a further 2 million planned at nearby Harwich by 2030 as part of the Bathside Bay port development5. In addition, Felixstowe’s owner Hutchinson Ports (HP) UK has stated its commitment to the use of rail transport at its ports. Their North Rail Terminal at Felixstowe, which opened in 2013, has helped to achieve a mode share for rail of 28 per cent3, among the highest of any container port in the UK.

The case for change This growth and investment presents an opportunity for the rail freight industry, and for the country, to take advantage of the economic and environmental benefits of transporting goods by rail. However, capacity constraints that exist on the rail network mean that additional freight trains cannot be accommodated on the current

2 Road to Zero Strategy July 2018 https://www.gov.uk/government/publications/reducing- emissions-from-road-transport-road-to-zero-strategy 3 https://www.portoffelixstowe.co.uk/#/about 4 https://www.bbc.co.uk/news/magazine-21432226 5 https://www.portoffelixstowe.co.uk/#/investing-in-the-future

infrastructure, creating a barrier to realising this opportunity. The need to address these capacity constraints forms the basis of the ‘case for change’.

The majority of rail freight from the Port of Felixstowe is destined for the West Midlands, the East Midlands, Yorkshire, North West England and the Central Belt in Scotland. To reach this locations, rail freight uses one of two routes: via the Great Eastern Main Line (GEML) and London to the main lines that radiate north, or via the ‘cross country’ route through Ely, Peterborough and Leicester. The route via London is intensively used by both passenger and freight services and is already operating at capacity. Not only does it carry traffic from Felixstowe, but also from the Essex Thamside corridor, itself home to two of Britain’s busiest ports in Tilbury and London Gateway. Unlike traffic from Felixstowe, freight trains from Essex Thameside have no alternative but to use the cross-London route. This, coupled with the need to increase the frequency of the London Overground passenger trains severely limits the scope for this route to also accommodate the growth in freight traffic from Felixstowe.

Because of the constraints on the route via London, the rail industry’s long-term strategy has been to focus on the cross country route as the principal growth corridor for rail freight traffic generated by Felixstowe. This has led to the establishment of the ‘Felixstowe to West Midlands & the North’ (F2WM&N) programme, a collection of enhancement schemes to boost capacity and capability of this corridor. It forms one of the key arteries of the Strategic Freight Network and represents huge strategic importance to the rail freight industry and the businesses that depend on it.

The Freight Network Study (FNS, published by Network Rail in 20176) identified the F2WM&N corridor as the highest priority corridor across GB for investment in rail freight capacity enhancement. This high prioritisation was based on the results of a weighting and scoring exercise, under which rail industry stakeholders scored 27 potential capacity schemes across GB against six criteria. The prioritisation reflected the high scores given to five schemes on this corridor: this proposed scheme in the Ely area and proposed schemes at Haughley Junction, in the Bury St Edmunds area, in the Syston East to Peterborough area and in the Leicester area. These schemes all received high overall scores, reflecting high scores on key criteria such as forecast growth in rail freight volumes, current capacity constraints, passenger benefits and stakeholder support.

Insert table/timeline of current and proposed F2N schemes

As the Economic Case explains, recent forecasts have predicted significant growth in intermodal traffic, with the more optimistic scenarios forecasting demand for between 15 and 25 additional intermodal (container) train paths per day in each direction to serve Felixstowe by 2024. This represents a significant uplift against an existing baseline of 33 paths per day. The majority of the forecast growth is to and from

6 https://www.networkrail.co.uk/wp-content/uploads/2017/04/Freight-Network-Study-April- 2017.pdf

destinations that can be viably served via the cross-country routing (as opposed to via London).

The medium-term aspiration of the F2WM&N programme is to provide capacity for up to 48 freight train paths per day across the corridor in each direction, with a longer term goal of providing up to 60 paths to accommodate demand forecast in the 2013 Freight Market Study, which looked at the period up to 2043.

Current value of F2WM&N Corridor to UK PLC and what is the anticipated growth. What can Ely offer to support this growth?

The Problem In addition to the points made above, The Anglia Route Study, published in March 2016, identified the Ely area as a key constraint in meeting future growth forecasts on multiple corridors. Analysis was undertaken as part of the Long-Term Planning Process (LTPP) to further determine the primary pinch points within this area, utilising previous studies on the subject to inform the assumptions and findings. Addressing the bottleneck (caused by a complex mix of services waiting for paths to clear in single line sections, speed restrictions associated with bridges and several key level crossings) will also lead to generalised journey time improvements for freight and passenger services, a further important benefit to an enhancement.

o Current services and existing capability in the Ely area

The following passenger services, indicated in trains per hour or tph, currently traverse the Ely area in the peak7 hours, in each direction (May 2016 timetable):

 1 tph Norwich to Peterborough (and beyond, for ex. Liverpool Lime Street/Nottingham)  Via Norwich, Thetford, Ely North Junction, Ely, Ely North Junction, March, Peterborough  1 tph Norwich to Cambridge  Via Norwich, Thetford, Ely North Junction, Ely, Cambridge  ½ tph Ipswich to Peterborough (once every two hours)  Via Ipswich, Haughley Jn, Bury St Edmunds, Soham Jn, Ely North Junction, March, Peterborough  1 tph Birmingham to Stansted  Via Peterborough, March, Ely North Junction, Ely Station, Cambridge  2 tph Kings Cross to Kings Lynn  Via Cambridge, Ely Station, Ely North Junction, Kings Lynn  1 tph Liverpool Street to Kings Lynn  Via Cambridge, Ely Station, Ely North Junction, Kings Lynn

7The peak hours refer to the busiest three hours in the morning or evening period. In this particular case, the peak hours are from 07:00 to 09:59 and 16:00 to 18:59. All other hours are deemed off-peak.

The above services amount to 6½ passenger tph in each direction during the peak hour. With the exception of the Kings Lynn services, whereby the Kings Cross to Kings Lynn service is reduced to 1tph and the Liverpool Street to King Lynn service is completely withdrawn (0tph), the remaining above passenger services also run in the off-peak hours, equalling 4½ passenger tph in each direction in the off-peak. In addition to the above passenger services there is also a requirement for 2 freight tph, every hour, leading to an overall total of 8½tph in the peak and 6½tph in the off- peak. ‘Freight’ generally refers to two types of traffic:  Intermodal/container traffic – also known as Class 4 traffic, typically lighter than other types of freight traffic and can therefore travel at higher speeds (up to 75mph). On Anglia intermodal traffic generally stems from ports such as Felixstowe.

 Aggregates (sand, coal, buildings materials) traffic – also known as Class 6 traffic, heavier than intermodal traffic and travels at lower speeds (up to 60mph). On Anglia aggregates traffic generally stems from Middleton Towers, Potters Yard and other locations.

The Ely area infrastructure therefore must accommodate passenger and both types of freight traffic. However, it should be noted that the benefits of Freight far outweigh the benefits associated with the passenger services. This is covered further in the economic case. Whitemoor Yard, located north of March Station on the former Wisbech branch, is a significant Network Rail Local Distribution Centre (LDC) handling materials for the South East, Anglia and London North East (LNE) routes, as well as engineering trains serving both the Anglia and LNE routes. It is therefore important to consider the requirements for the maintenance operations associated with Whitemoor. The maintenance engineering paths can on average amount to 4-5 paths per day during the week (usually in the evenings) and up to 13 paths throughout the day during the weekend, each way. Access for these trains is already constrained. As passenger and freight demand increases, access is set to become an even greater problem for engineering and maintenance activities if consideration is not given to how this can be mitigated. The Ely area is unable to accommodate any additional services either in the peak or off-peak without compromising performance and adversely impacting the existing level crossing risk. Extensive analysis within Network Rail has indicated that the Ely area is currently unable to accommodate any increase in the current level of service due to a combination of infrastructure constraints that affect the achievable timetable. The key Ely area constraints for both passenger and freight services comprise:  the Queen Adelaide and Kiln Lane level crossings  freight speeds and headways  the Ely Station layout, and  the single Ely North Junction.

Figure C:1 Ely Area Constraints Map

The constraints in the wider corridors beyond Ely include (but are not limited to) the single track sections at: Trowse Swing Bridge (Trowse Junction); Haughley Junction; Ely to Soham; and the Kings Lynn Branch. These constraints are not addressed in the proposed scheme and therefore are not covered further in this document.

Why Ely (and Haughley), & Why Now? The F2WM&N corridor has several locations where capacity contstraints exist, restricting the volume of freigh trains that can operate on the corridor. In addition to Ely, other constrainsts include Haughley Junction near Stowmarket, the Ely – Soham single track section, and the Leicester area. However, the Ely area is the biggest single constraint on the F2WM&N corridor and the reason that the current baseline level is 33 train paths per day. The Ely Area Capacity Enhancement will address this and provide capacity for 72 train paths per day through the Ely area, comfortably in excess of the 60 path long term aspiration, although the other constrainst that exist on the corridor would restrict overall capacity to 41 to 42 daily paths (up to 46 paths achievable if the Ely – Soham doubling scheme, currently paused following the Hendy Review, were to go ahead).

However, because Ely is the limiting factor on the corridor it dictates the capacity for the entire corridor. Delivering any other scheme on F2WM&N (e.g. Haughley Junction, Ely – Soham doubling) will buy no extra capacity for the corridor because the constraint at Ely will still exist. In order to deliver any capacity uplift for the corridor, EACE must be delivered first, before any other enhancement. It is for this reason that EACE represents such a priority for rail freight investment. Once Ely is delivered, the corridor has the potential to accommodate the forecast growth right up to 2043 (insert a table of forecast growth), but without it, the corridor cannot support any growth above the current baseline. In view of the constrainsts that already exist via London (as discussed earlier), failure to deliver EACE will negate any opportunity for rail freight to take advantage of the growth already experienced as well as any anticipated growth from the Port of Felixstowe. (insert a chart to show the growth and how without Ely the growth will be slowed/ stopped)

Having considered the problem statement, the 'why now' is also based on the following key elements:  The nationally strategic significance of the experienced and forecast freight growth, in particular intermodal, on the cross-country corridor, particularly in light of the completion of the CP5 Felixstowe Capacity Enhancement scheme which will increase freight capacity on this branch and the expectations of the F2WM&N programme;

 The recently awarded Thameslink, Southern and Great Northern (TSGN) and East Anglia (EA) franchises, both of which specify additional services through Ely, which cannot be realised without these enhancements;

 The committed and projected housing and employment numbers in the surrounding area, which will lead to an increase in patronage and traffic on the roads; both of which will need to be alleviated in part through rail, the same increase in the road users will impact the usage of level crossings in the area;

 Strong political and local momentum around Ely, to do with passenger service aspirations in the region, ensuring that connectivity is improved to and from Cambridge via Ely, Ipswich, Norwich and Kings Lynn;

 The greater opportunity that early consents development and public consultations would provide to the Ely area as a whole; and.

 A high level of support and expectation amongst stakeholders.

Failure to begin development now will result in a lesser chance of its delivery being possible within CP6, thereby realising the forecast growth on the route. In addition to this, the Department for Transport (DfT) has awarded two franchises which serve on the Anglia Route, both of which specify new services passing through Ely North Junction. The Thameslink, Southern and Great Northern (TSGN) franchise, which is run by Govia Thameslink Railway (GTR), lasts from September 2014 to September 2021. GTR currently runs 2 tph in the morning peak from Kings Cross to Kings Lynn via Ely, reducing to 1tph in the off-peak. The franchise service specification requires a service increase to 2tph between Kings Cross and Kings Lynn in the off-peak in May 2017. To achieve this, an additional path needs to be provided through Ely – the main constraint in this particular instance being the level crossings and single leads. The new East Anglia (EA) Franchise, which has been awarded to Abellio East Anglia (AEA), will last from October 2016 to October 2025. The services which Abellio currently operates through Ely and will continue to do so to 2019, are the ½ tph Ipswich to Peterborough; the 1tph Norwich to Cambridge; the 1tph Ipswich to Cambridge; and the 1tph high morning peak only Liverpool Street to Kings Lynn. The franchise service specification details a requirement for the Ipswich to Peterborough service to be uplifted to 1tph in May 2019. To achieve this will require an additional path to be provided through Ely (as well as other enhancements). The dates noted, means that the franchise commitments made by DfT cannot be realised. In both cases the necessity of enhancing the Ely area scheme as soon as possible is brought forward by the timescales of the franchise and service proposals per franchise.

It is also worth noting that the Cross-Country franchise is due to be renewed in October 2019, with the refranchising process set to begin in December 2017. Although no increase in the Birmingham -Stansted service is stipulated in the existing franchise specification, given the prominence and demand for interregional connectivity this could possibly change with the next franchise award. The same argument corresponds to the East Midlands franchise, which contains the Norwich – Peterborough (and beyond) service and which is due to be renewed in July 2018. The latter service increase aspiration is also highlighted in the East Midlands Route Study (March 2016). Should this be the case for either or both two franchises, an increase in service may well be specified for CP6 and beyond, further supporting the strategic requirement for the earlier design and therefore delivery of the Ely area scheme.

Other rail freight benefactors of EACE

Whilst the vast majority of freight demand in the Ely area relates to intermodal traffic to and from Felixstowe, there are a number of terminals in the region which serve the construction materials sector, and which generate freight trains through Ely. These include facilities at Ely Potter Group, Bury St Edmunds, Barham, Kennett, Marks Tey, Norwich Trowse, Harlow Mill and Bow. Like intermodal, the construction materials sector is forecast to grow, with tonnes lifted by rail predicted to increase by 4.2 per cent every year between 2019 and 2024. In addition, trains supplying sand for the glassmaking industry run from a site at Middleton Towers, near Kings Lynn, run via Ely. Similarly, Whitemoor Yard at March is a major facility for Network Rail’s Supply Chain Operations, generating regular and ad-hoc freight train movements through Ely to support the maintenance, renewal and enhancement of the rail network.

Geographical and local Context

Ely, set within the district of East Cambridgeshire District and within Cambridgeshire & Peterborough County Council.

The City of Ely has a historic city centre which provides a range of shops, pubs, restaurants and other services. The current key attractors for local residents are various markets, plus Ely Cathedral which attracts over 250,000 visitors a year. The city centre is focused along the High Street, Market Street, Market Place and the Cloisters shopping precinct. Ely Cathedral lies to the south of the Figure C:2 Geographical Context of Ely core shopping area and leisure facilities are currently located within the Paradise area to the north. The current state of the transport system around and through Ely is less than acceptable to support the levels of depreivation, a recent transport study commissioned by Cambridgeshire County Council has found concerns regarding:

i. The role of Ely to Cambridge area in the Cambridgeshire economy is dependant on realeasing capacity on the local road network (namely, A10), which can be done via some road and rail interventions; ii. Capacity Constrainsts threaten further growth due to zero capacity being available The key benefit or impact that the Ely Area Capacity Enhancement programme will bring to the dristrict and surrounding region is the additional capacity for both passenger and freight. It has been long understood that there is a correlation between good transport links and the ease of deprivation, it is therefore assumed at this early stage of development that the same would apply in east Cambridgeshire if Ely was granted further investment to realise the associated benefits it would delivery. East Cambridgeshire is ranked 12,612 out of 32,844 LSOA's in England; where 1 ranked is the most deprived LSOA. this is the amongst the 40% most deprived neighbourhoods in the country. East Cambridgeshire is within Ealy East ward and one of 50 LSOA's in East Cambridgeshire local authority district.

Figure C:3 CPCA Strategic spatial framework (non statutory)

Housing Overall and relative to the the Land Registry indices for house prices in both the neighbouring areas, East Cambridgeshire with its slightly more affordable homes for is likely to continue to attract more incoming residents who are looking for good transport connections and improved infrastructure facilities, including improved Level Crossing facilities to access their homes and businesses. This concept aligns with the Combined Authority’s (Cambridge Peterborough Combined Authority - CPCA) vision to provide sustainable and inclusive growth whereby tackling social inequalities through strategic investment by the government is deemed as an effective tool to demonstrate the UK’s Industrial Strategy for growth.

As part of further development and design work the programme is looking to work closely with CPCA and CCC to identify further opportunities for housing as a consequence of land purchase for temporary and permanent land take.

The current expected housing development in local authorities and wards along the Ely branch lines (2017-2036) is shown in the table below8:

Current number of dwellings Projected number of new dwellings Projected % increase

King’s Lynn and West Norfolk 76,470 15,130 20.0% Breckland 60,420 10,180 17.0% South Norfolk 59,600 13,700 23.0% Norwich 65,290 13,610 21.0% Broadland 57,540 4,760 8.0% Forest Heath 29,150 3,450 12.0% St Edmundsbury 48,930 13,070 27.0% Ipswich 61,070 17,230 28.0% Mid Suffolk 44,180 12,420 28.0% Babergh 40,330 7,270 18.0% Total 542,980 110,820 20.4%

The Cambridgeshire and Peterborough strategic spatial framework (non-statutory) paper for growth up to 2050 states that one of the main priorities for the Combined Authority in East Cambridgeshire is the development of new housing within identified strategic site locations. See the map and table below which provides locations and number of homes due to be built. Ely has 7 strategic site locations, indicating a total of

3,000 new homes by 20319. Additional homes will mean increased road and rail users, another opportunity for the Ely scheme to deliver improvements to the local and national transport network.

Figure C:4 Forecast Housing Growth Along Rail Corridors

8 Source DCLG (for current dwellings) and the EEFM (for forecast) 9 Cambridgeshire and Peterborough strategic spatial framework (non-statutory) paper

It should be noted that although housing growth has been ear-marked for the Ely and connected areas, there is currently no evidence that corelates rail and road enhancements from the scheme to housing needs.

The Ely scheme is about addressing existing constraints on an existing system, which aim to unlock Freight growth and UK trade and construction businesses.

Exploring the options and strategic alternatives a) Assessment of the options (SIFTING OUTPUT and FEASIBILITY REPORT) The Rail scheme has generated some critical success factors (CSF's) to support the development of options during the feasibility stage. A nine-point scale was used for assessment, which aimined to compare each of the high-level options against the current do-nothing' scenario (explain the do nothing scenario).

>>>/ <<< One option is over-ridingly better than/worse than the other (use sparingly please) >>/<< One option is clearly better than/ worse than the other > / < One option is better than/worse than the other ≥ / ≤ One option is marginally better than/worse than the other = Options are equal

Critical Success Factors for the Rail Scheme

Affordability Capital costs relative to other options

Capital cost presents value for money

Operational Impact Schedule 4 costs and other compensation costs

Operational impact during construction

Impact of longer term operating costs

Option optimises sustainability Impacts

System Resilience Provides system reliability

Availability of the option during 'shut down' periods.

Ease of maintenance (incl. access to site)

Strategic Fit Provides journey time improvements

Provides compatibility with long term (future projects) infrastructure development

Provides compatibility with (current) interfacing projects

Reputational Impact to NR

Contributes towards the economic performance in the area

Delivering Capacity Feasibility of phasing the option

Provides passive provision for multi-modal scheme development

Aligned with wider economic growth for LA's and region

Provides capacity in line with strategic objectives

Stakeholders Provides mitigations to reduce the impact to wider community

Promotes complimentary interface with other (non NR) projects in the region

Option has mitigated environmental and sustainability impacts

Meets with stakeholder objectives

Volume of land take

A series of workshops were attended by internal and external stakeholders using the crirtical success factors to sift the initial high level options developed. Operators, maintainers, level crossing managers, funders, LEP's and envionrmental managers were invited to assess the initial set of options so that they would be sifted down to a suite of options which were deemed appropriate for further development and testing. The sifting phases were as follows:

To assess the suitability of the high level options against a 'do nothing' scenario an assessment of the current conditions at Ely scheme were established. This involved engagement with the operators and maintainers of the route, plus the programme team and its funders. . The baseline assessment is outlined below:

Main Criteria Sub criteria (main criteria can be further sub divided if required) Do nothing

Capital costs relative to other options Affordability Capital cost presents value for money Schedule 4 costs and other compensation costs >>> Operational impact during construction >>> Operational Impact Impact of longer term operating costs >> Option optimises sustainability Impacts ≥ Provides system reliability > System Resilience Availability of the option during 'shut down' periods. >>> Ease of maintenance (incl. access to site) >> Provides journey time improvements <<< Provides compatibility with long term (future projects) infrastructure development <<< Strategic Fit Provides compatibility with (current) interfacing projects << Reputational Impact to NR < Contributes towards the economic performance in the area <<< Feasibility of phasing the option ≥ Provides passive provision for multi-modal scheme development < Delivering Capacity Aligned with wider economic growth for LAs and region << Provides capacity in line with strategic objectives (GRIP 2 Remit) << Provides mitigations to reduce the impact to wider community <<< Promotes complimentary interface with other (non NR) projects in the region << Stakeholders Option has mitigated environmental and sustainability impacts >>> Meets with stakeholder objectives <<< Volume of land take >>>

The outcome of the baseline indicates that a need for change is required in order to support the strategic fit, enable short, medium and longer term capacity increase and to satisfy stakeholder objectives (for both statutory and non- statutory). The stakeholder objectives of the scheme are outlined earlier in the strategic case.

The high-level options, which have been developed for the scheme that involve a series of track, civils, signalling, level crossing and bridge interventions, as follows:

Combined Ely Dock Ely North & West Option/ Junction & Junctions (ENJ1) Alternative Station Area and New (ESA) Alignments (NA)

Ely Area 1 ESA2.5 ENJ 1 2 ESA2.5 NA5.1 3 ESA2.4 ENJ 2 4 ESA1.3 NA 4 5 ESA2.5 NA5.2 Plus numerous level crossings to suit the core scheme

Ely North Junction (ENJ 1 & 2) Currently the single lead between five routes (Up Peterborough, Up/Down King’s Lynn and Up/Down Norwich) causing delays to passenger trains. To escalate trains must proceed one at a time over this junction. Option ENJ1 enables a greater number of simultaneous movements to be made over the junction, reducing reactionary delay when services are running out of course.

Assessment of how well this option performed within the overall scheme is to be developed further.

Ely New Alignment (NA 4 & 5) Ely New Alignment layout provides new track alignment for Peterborough lines that crosses rural land on an elevated structure into Kings Lynn and thus closing at least one level crossing at Queen Adelaide. It also provides a rationalised layout for Ely North junction by including double tracking of the Norwich lines at this junction.

This option requires road construction works to be undertaken by the council so as to provide an alternative by pass for the residents of Queen Adelaide and Prickwillow. Details of the road development are not known at this stage. WSP Road to provide further input

Ely Station Alignment (ESA 1 & 2) The ESA layouts enhances the capability of the Ely area locally around the station to improve train throughout, namely:

 Improved standage capability for 775m freight trains for regulation at Ely  Improved speeds through Ely for freight trains, providing a reduced headway behind  these trains in both directions between Ely and Ely North Junction, and  Additional parallel working at the north end of the station, reducing the level of conflict necessary to make north-to-north reversing moves (required at least twice per hour).

The proposed works at the station look to provide greater flexibility for the regulation of trains. All existing capability appears to be at least retained or enhanced in terms of train types and lengths, including the required 775m freight standage.

Meeting the strategic objectives How do the alternatives meet the strategic objectives of the scheme, INCL ROAD and LC's - awaiting the details from CCA and further decisions from the stakeholders

New Anglia Strategic Economic Plan UPDATE THESE as a workshop..with road team The New Anglia Strategic Economic Plan (March 2014) which focuses on Norfolk and Suffolk, details the transport and other infrastructure improvements required to support and enable the housing and employment growth targets in the New Anglia region. Among others, the following railway priorities are specified:  Better passenger connections between other major economic centres, particularly east-west links.  More capacity into the main economic centres of Ipswich and Norwich.  Improved freight connections with the Felixstowe Port to markets in Europe and throughout the UK.

Norfolk County priorities The Norfolk Rail Prospectus (July 2013) details the following priorities for Norfolk:

 Half-hourly (2tph) frequencies between King’s Lynn and London, and Norwich and Cambridge.

 In terms of new infrastructure, short-term priorities include upgrading Ely to allow, amongst other things, King’s Lynn to Cambridge and Norwich to Cambridge half-hourly services.

 Reduced journey times between Norwich and Cambridge to 70 minutes and between Norwich and Liverpool to 5 hours 20 minutes.

 Providing passengers with greater choice in terms of frequencies and time of travel.

Suffolk County priorities The Suffolk Local Transport Plan 2011-2031 (2011) includes the following aspirations in terms of required rail transport improvements:

 Greater frequency and higher quality services between Cambridge, Peterborough and Ipswich.

 Development of the Felixstowe to Nuneaton route, to facilitate freight modal shift to rail and improvements for freight services.

Cambridgeshire County priorities The Cambridgeshire County Local Transport Plan 2011-2031 (July 2015) stipulates that the population of Cambridgeshire and Peterborough is forecast to grow by circa 23-24 per cent over the next two decades, to around 1,000,000 people, with demand for new homes and employment significantly increasing. Among other strategic transport requirements, strategies and assumptions, the following rail improvements are mentioned:  Ely area rail infrastructure improvements (including the Ely – Soham scheme).  A half-hourly Cambridge to Kings Lynn service.  A half-hourly Cambridge to Norwich service.  A new hourly Nottingham to Stansted Airport service.  March to Wisbech rail reinstatement, including freight.

What the are interdependencies (ECONOMIC ANALYSIS, SPONSOR and STRATEGIC PLANNER to update for OBC, not SOBC)

The following are schemes which are key interfaces and interdependencies with the EACE programme, its development and delivery. The list outlines phisical interfaces but also schemes, which have referenced EACE as a key enabler for their scheme to deliver its overall benefits. This list highlights the strategic importance of EACE as a scheme in the region.

 Cambridgeshire Corridor Study  Ely to Soham doubling scheme  Soham New Station Proposal  Haughley junction  A10 corridor study  Cambridge South Station  Franchise Agreements (XXX)  National Level Crossings Risk Reduction programme  King’s Lynn to Cambridge 8-car scheme  Ely to Peterborough ETCS scheme  Manea and Whittlesea Station Enhancements scheme  Waterbeach Station relocation proposal  Cambridge North Station  March to Wisbech reopening proposal

 Ely Road Bypass  West Anglia Power Supply Upgrade  • Queen Adelaide level crossing traffic calming

Stakeholders support for the scheme There is a large mix of stakeholders known for the scheme:

• TOCs - GTR, GA, Cross-Country, East-Mids, • FOCs – DB Schenker, GBRf, Freightliner, Felixstowe Port, • Councils and Local authority areas – Cambridge City Council, Cambridgeshire County Council, East Cambridgeshire District Council, South Cambridgeshire, Fenland, Huntingdonshire, Norfolk, Suffolk, Ipswich, Forest Heath, North Hertfordshire, South Kesteven Peterborough, Rutland, St Edmundsbury, Uttlesford, West Norfolk & King’s Lynn, South Holland • Greater Cambridgeshire Greater Peterborough Combined Authority and Mayor • Greater Cambridge Partnership • Local Enterprise Partnerships: Greater Cambridgeshire and Greater Peterborough, New Anglia • MP’s: Elizabeth Truss, Lucy Fraser, George Freeman, Henry Bellingham, Steve Barclay. Extensive discussion with stakeholders has occurred and a specific Ely Area Taskforce has been setup, demonstrating that the proposed enhancement scheme has a high level of support. An increase in capacity over the Ely area would complement the local growth plans and support the socio-economic regeneration aspirations along the corridor, including freight.

Key supporting stakeholders include the Cambridge & Peterborough Combined Authority, Cambridgeshire Country Council (CCC), Suffolk County Council (SCC), Norfolk County Council (NCC), local authorities on the route, the Port of Felixstowe, local community rail partnerships (CRPs), as well as members of parliament (MP) including Elizabeth Truss, Stephen Barclay and Lucy Frazer. The MPs have historically been vocal concerning the requirement for an intervention in Ely which has led to the Ely Area Taskforce being setup in the first place.

The Greater Cambridge Greater Peterborough (GCGP) Local Enterprise Partnership (LEP) is also in support, as is the New Anglia LEP. GTR, East Midlands Trains, CrossCountry trains, Abellio East Anglia, GB Railfreight (GBRf), DB Cargo (DBC) and Freightliner also strongly support the scheme.

Each of these stakeholders has a good understanding of the current proposals.

Further information is provided in the management case of the business case.

ECONOMIC CASE ADD PURPOSE and check all the numbering and cross referencing

Scheme Options

This socio-economic appraisal was carried out in accordance with the DfT’s appraisal guidance, in particular the web-based transport analysis guidance or WebTAG, available at gov.uk. Costs and benefits were assessed over a 60 year appraisal period.

Scheme options and the Base Case - This section presents the scheme options and the Base Case in turn, and then summarises them in a table.

Scheme options For this appraisal two options are being considered, Options S1 and S2. These are summarised in Table D.01. As shown by the table, the options vary in terms of the scope of the works assumed to be included within the EACE programme. Option S1 has a reduced scope; Option 2 has an increased scope. The options do not vary in terms of the risk allowance applied: as discussed in Section D.03.03, for both options the appraisal is based on a point estimate (excluding risk) and the same level of optimism bias is applied.

Table C.01: Description of options Option Description Option S1 This comprises: track option Ely North Jn ENJ1, Ely Station Area option ESA2 and (Low End Level Crossings option 2 (closure and diversion option). Costs) Option S2 This comprises: track option Ely New Alignment NA4, Ely Station Area option ESA2 (High End and Level Crossings option 3 (closure and road bridge option). Costs) Notes Source: EACE Formal Cost Plan Report Update, 14.11.18. Base Case / Do-Minimum The Base Case – Do-Minimum (the Base Case) for this appraisal is the current situation, with the following exceptions.

 The Base Case assumes the completion of the Felixstowe branch line scheme (the CP5 scheme); and  The Base Case assumes the standardisation of non-intermodal freight paths and recasting of the timetable for the Felixstowe branch line.

The Base Case also assumes that, without this scheme, the relevant freight would be transported by road. The Base Case for the passenger services assumes that new franchise rolling stock is introduced on Greater Anglia. However, it assumes that the stated franchise committed service improvements cannot be implemented without EACE:

 An increase in off-peak frequency between Ely and Kings Lynn from 1 tph to 2 tph, by extending a Kings Cross to Ely service.  An increase in the frequency between Peterborough and Ipswich, from 0.5 to 1 tph.

Summary of scheme options and the Base Case Table D.02 summarises the differences between the Base Case and the Scheme options. The outputs / benefits are discussed in Section D.03.

While the table represents the current view of the Base Case and Scheme options and outputs, consideration is being given as to whether the Base Case service level should have lower freight outputs, as 35 to 36 tph may not be able to operate without level-crossing enhancements. This is discussed in Section D.03.03. The table makes no assumptions about whether the passenger outputs under the Base Case require level crossing enhancements, since these services cannot be run, from a capacity perspective, without the EACE programme.

Table D.02: Summary of scheme options and the Base Case

Base Case (Do Scheme options Minimum)

Infrastructure Current infrastructure With EACE programme. plus completion of Excludes Ely – Soham doubling. Felixstowe Branch scheme (CP5 scheme).

Level crossing Current level crossings The estimates assume 22 work crossing upgrades and no overbridges under LC option 2 (Option S1) and 28 upgrades and 9 overbridges under LC option 3 (Option S2). The number of upgrades and closures required is to be confirmed following further level crossing safety risk analysis10.

Freight outputs 35 to 36 paths per day 41 to 42 paths per day (+ 6ppd)

10 The estimates are summarised in Table C.03 – see below. The LC options are referred to in Table C.01 – see above.

Passenger Current timetable As Base Case plus franchise Outputs Franchise rolling stock commitments:  Ely to Kings Lynn off- peak extension (from 1 to 2tph)  Peterborough to Ipswich increased frequencies (from 0.5 to 1 tph)

Economic appraisal assumptions and methodology This section addresses the main costs and benefits in turn: capital costs, operating costs, freight benefits, passenger benefits and level crossing benefits. Assumptions are presented in this section and in Table 1 in Appendix 1. Capital costs Initial capital costs Initial capital costs are shown in Table D.03. These costs are the point estimates for each option. The Anticipated Final Cost for each option are £650m for Option S1 and £820m for Option S2 (the AFCs are for reference only and are not used in the appraisal). The discounted Present Value (PV) of these costs is shown in Table D.13. These costs include various adjustments, including the application of optimism bias (at 64%). Table D.13 also shows rail user and non-user disruption dis-benefits during possessions. These are based on Schedule 4 costs, which are included in the capital costs – see Table 1 in Appendix 1. Future versions of this business case will use updated capital costs, clarify funding assumptions, use revised assumptions for the breakdown of cost by F/Y and clarify Schedule 4 costs. Sunk costs will be excluded from the Central Case in line with WebTAG.

Table C.03: Initial capital costs Option Proposed funding source £m Option S1 Public funds - TBC 327.6 (Low End Costs) Option S2 Public funds - TBC 411.1 (High End Costs) Notes The capital costs used for the appraisal, as quoted above, are the point estimates and exclude risk and escalation. The Low End point estimate is from "Options Low End P80" table in Appendix C, EACE Formal Cost Plan Report Update, 14.11.18. High End point estimate is from "Options High End P80" table in same appendix. 100% of the above total costs are assumed to be incurred in 2025, based on the Cost Plan Report (this is the mid-point of the expenditure and all the expenditure is allocated to this year as a simplification). The above costs are in 2018 factor prices, at GRIP stage 1. b) Renewal costs Renewal costs are shown in Table C.04. These assumptions will be reviewed for further versions of this business case. Any renewal cost savings also need to be considered. The PV of these costs is shown in Table C.13. These costs include various adjustments, including the application of optimism bias.

Table C.04: Renewal costs Option £m Option S1 (Low End Costs) 131.0 Option S2 (High End Costs) 164.4 Notes Renewal costs are assumed to be 40% of initial capital costs. This is in line with the assumptions used for the F2N Strategic Business Case (2014) and the Felixstowe Branch scheme appraisal (2017). 50% of the total renewal costs are assumed to be incurred in 2051 (after 25 years) and 50% are assumed to be incurred in 2076 (after 50 years). The above costs are in 2018 factor prices, at GRIP stage 1, are undiscounted and exclude optimism bias. c) Operating costs No additional Network Rail operating costs (or cost savings) are assumed at this stage. Extra NR operating costs (or cost savings) will be reviewed for future versions of the business case. Extra TOC operating costs associated with running additional passenger services are addressed in Section

d) Freight benefits The freight benefits included in this appraisal reflect the benefits associated with the additional rail freight resulting from the scheme and the associated “mode shift benefits” – the benefits of transferring freight from road to rail in terms of a reduction in the number of lorries on the roads. These benefits depend on the number of extra freight trains which are expected to operate as a result of this scheme. This depends on the capacity increases from the scheme and forecast increases in demand, which are addressed in turn. e) Capacity increase The latest capacity analysis report for the scheme11, estimates the capacity under the scheme option (Options S1 and S2) relative to the Base Case (see above). The report shows that freight capacity increases from 35 to 36 paths per day under the Base Case to 41 to 42 paths per day under Options S1/S2, an increase of six paths per day12. These capacity increases refer to the “Without Ely to Soham intervention” scenario. There is also an increase in passenger services; the benefits associated with the additional passenger services are addressed in Section C.03.04. The benefits of 6 extra paths per day are subject to confirmation that 35 to 36 paths per day in the Base Case can be run without level crossing enhancements (which are included in the scheme) and that the scheme options will provide 41/42 paths per day. The capacity analysis report does not address level crossing risks. It is understood that analysis by the level crossing team is being carried out to address these issues. This analysis will also address what level crossing enhancements are required to deliver incremental increases in paths per day above the base case. Future versions of this business case will need to reflect this analysis. The same benefits of 6 extra paths per day are assumed to apply to both Options S1 and S2. This will be reviewed for future versions of this business case. Further scheme options may also be considered e.g. different components of S1/S2 such as the level crossing components only. The benefits of each component will need to be aligned with the scope of that component. As noted in the report, the number of paths under both the Base Case and Options S1/S2 depend on the standardisation of non-intermodal freight paths and the recasting of the timetable. These conditions are therefore included in the Base Case – see above. The benefits take account of capacity on the lines of route between Felixstowe and Nuneaton via Ely and between Felixstowe and Wembley via London. While the capacity analysis for this scheme focuses on the route via Ely, Table 4 in the report confirms that the same increases in capacity apply after taking account of the via London route (which was assessed for the Felixstowe scheme capacity analysis) i.e.

11 EACE Timetable Study, Ed Jeffery Ltd, draft 21st November 2018. The author has confirmed that the Base Case does not require headway reductions between Ely and Ely North Jn. 12 See Tables 1 and 4.

the same increases apply to Felixstowe flows via either route rather than just to Felixstowe flows via Ely.

The capacity analysis report identifies performance risks associated with running these additional freight and passenger services, including risks at Haughley Jn and between Haughley Jn and Chippenham Jn. However performance was not specifically assessed as part of this study. Further work is planned within Network Rail over the next few months to quantify these performance risks and assess the implications for the EACE programme and the business case.

Comparison of capacity increase with forecast growth Extra freight on the network will only result from the scheme if the increase in capacity is needed to meet forecast increases in demand. The increase in capacity as a result of the scheme is shown in Figure C.01 as the difference between capacity under the Base Case and capacity under Option S1 (note: in this section the same figures apply to Options S1 and S2). The increase in capacity under the Base Case reflects the projected increase following completion of the Felixstowe branch scheme in c. 2020: an increase of four paths per day relative to 2016/17. The increase in capacity under Option S1 reflects increases following completion of both the Felixstowe scheme and the Ely scheme (six paths per day from c. 2027 as discussed above), giving a total increase of ten paths per day from 2027. The difference between Option S1 and the Base Case is six paths per day from 2027, the capacity increase from the Ely scheme. The capacity figures in Figure D.01 all refer to total paths per day in each direction to/from Felixstowe. Figure D.01 summarises the latest forecasts (the “new forecasts”) which are available for flows to/from Felixstowe. The report on these forecasts was issued by NR in May 2018 following consultation with industry stakeholders13. Figure C.01 shows forecast demand to/from Felixstowe under four scenarios, as follows:  Scenario A2: factors which favour rail relative to road freight; low (total road and rail freight) market growth;  Scenario B2: factors which favour rail relative to road freight; high market growth;  Scenario C2: factors which disfavour rail relative to road freight; low market growth;  Scenario D2: factors which disfavour rail relative to road freight; high market growth. The scenarios are explained in detail in the report. Forecasts were only produced for 202314. Figure C.01 extrapolates these forecasts to 2028. The forecasts in Figure C.01 are unconstrained – they do not take account of the capacity or capability of the network. Unconstrained forecasts were used for this analysis because the issue of capacity constraints is addressed in detail in the capacity analysis (see above); the

13 Rail Freight Forecasts: Scenarios for 2023/24. Final Report for Network Rail. MDS Transmodal. May 2018. The figures in Figure 1 are based on the accompanying maps. 14 New forecasts are currently in the process of being developed for 2033 and 2043.

capacity constraints applied in the new forecasts (see below) were applied at a very- high level and in much less detail than in the capacity analysis report. The new 2023 forecasts replaced the 2023 forecasts in the Freight Market Study (FMS)15. However, at the time of writing, the new forecasts are not available in as much detail as in the FMS, since industry-agreed routeing assumptions have not been applied; therefore FMS data is used for some of the analysis in this report as noted below. In summary, Figure C.01 indicates that in 2027:  The increase in capacity from the Ely scheme (S1) is needed in full to meet forecast demand under scenarios B2 and A2, the two scenarios most favourable to rail freight (the “pro-rail” scenarios);  The increase in capacity from the Ely scheme (S1) is needed in part to meet forecast demand under scenario D2. Beyond 2027 the need is increased if the forecast demand is extrapolated as shown in Figure D.01. The first full year of benefits is 2029 (see Appendix 1, Table 1);  The increase in capacity from the Ely scheme (S1) is not needed to meet forecast demand under scenario C2.

Figure C.01: Comparison of forecast growth under four scenarios (the “new forecasts”) with capacity increases under the Base Case and Option S1

15 Freight Market Study. Network Rail. 2013.

Comparison of new forecasts and the DfT forecasts This section compares the new forecasts for rail freight for 2023 (see above) with the DfT’s rail freight forecasts16. The DfT’s forecasts are not available on the same basis as these new forecasts. The DfT’s forecasts do not include unconstrained forecasts for flows to/from Felixstowe. However the DfT’s forecasts do include constrained forecasts at the GB level, broken down by commodity sector. Such constrained forecasts at the GB level are also available as part of the new forecasts. The DfT’s forecasts are not available for 2023, but they are available for 2030.

Figure C.02 compares the new forecasts for 2023 with the DfT’s forecasts for 2030 for the ports intermodal sector only, which is most relevant to this scheme. Figure C.02 compares the DfT’s constrained forecasts with the new forecasts on a constrained basis, where available. For the new forecasts the figure presents two constrained scenarios, A3 and B3 (these are the same as A2 and B3 – see above - except they include a high-level capacity constraint as discussed in the report) and two unconstrained scenarios, C2 and D2. Constrained scenarios are not available under scenarios C and D, but if they were available they could be expected to be very similar to the unconstrained scenarios C2 and D2.

Figure C.02 shows that the DfT’s central case forecasts are above Scenarios A3 and B3 in terms of projected volumes in 2030. In terms of annual growth rates, which is probably more relevant, they are similar: the growth rates from 2016/17 to 2023 under the new forecasts and from 2011/12 to 2030 under the DfT forecasts are all between 4 and 5% per annum, on a compound annual growth basis.

It is acknowledged that the DfT’s low growth scenario more accurately reflects actual intermodal growth (at the GB level) in recent years than the DfT’s central growth scenario. However growth under the DfT’s low scenario is significantly higher than growth under scenarios C2 and D2 under the new forecasts – see Figure C.02. This would suggest that using scenarios C2 or D2 for this appraisal would not be appropriate.

Based on the comparisons between the new forecasts and the DfT’s forecasts, this report uses scenarios A2 and B2 as the most relevant forecasts for this analysis.

Figure C.02: Comparison of forecast growth under four scenarios (the “new forecasts”) with the DfT’s forecasts

16 Rail Freight Strategy. Department for Transport. 2016.

Extra rail freight As discussed above, the capacity increases from the scheme under Options S1 and S2 (six extra paths per day), can be expected to result in the same increase in rail freight on the network – they do not need to be reduced to take account of the forecasts. Under the Base Case, the equivalent amount of freight is assumed to be transported by road.

The extra rail freight on the network resulting from the scheme, relative to the Base Case, is summarised in Table C.05.

As noted above, the capacity increases under Options S1 and S2 take account of capacity constraints on the lines of route, not just in the Ely area. Therefore, the extra trains in Table C.05 can be assumed to be able to run to their final destinations, not just to/from the Ely area.

Table C.05: Additional freight paths per day Option Flow 2029 Options All flows 6.0 S1 and S2 Notes Benefits shown refer to 2029 onwards. No increase is assumed after 2029. Benefits are phased in between 2027 and 2028 - see Table 1, Appendix 1. Paths per day are in each direction, to/from Felixstowe.

The destination of these extra trains is shown in Table C.06. The main destinations are the North West and the West Midlands.

Table C.06 Distribution of additional freight trains by flow Option Flows between: % of total Options Felixstowe & East Midlands (Kegworth) 10.4% S1 and S2 Felixstowe & North East (Teesport) 3.2% Felixstowe & North West (Trafford Park) 40.2% Felixstowe & Scotland (Mossend) 1.5% Felixstowe & West Midlands (Hams Hall) 32.1% Felixstowe & Yorks & Humber (Wakefield) 12.6% Total 100.0% Notes The distribution of the additional freight trains by flow is based on the origins/destinations of the forecasts in the Freight Market Study (FMS) data. The figures shown are based on forecast growth to 2023 under the lower scenario, relative to the base year. The figures shown refer to all flows to/from Felixstowe (between Ely and Ely North Jn). Each specified flow represents all the flows in the relevant region. The locations shown in brackets are representative locations within each region. FMS data was used instead of data from the new 2023 forecasts because detailed forecasts for Ely are not currently available as part of the new forecasts. The representative locations take account of the new forecasts (the data accompanying the report).

Mode shift benefits The next stage in the estimation of these benefits is to estimate the benefits of removing a single lorry journey for each of the destinations (flows) discussed above. These benefits are estimated by the Marginal External Costs (MECs) associated with these lorry journeys i.e. the avoidance of these costs. The MECs for 2030, as an example year, are shown in Table C.07. The MECs vary widely between flows, with the highest costs on the flow to the North West. The MECs also increase between 2030 and 2035, mainly due to forecast increases in road congestion.

Table C.07 Marginal External Costs (MEC) per single lorry journey in 2030

Total MEC Average per single Km per MEC benefit Option Flows between: journey (£) journey per km (£) Options Felixstowe & East Midlands (Kegworth) 117.0 262.8 0.45 S1 and S2 Felixstowe & North East (Teesport) 151.5 440.8 0.34 Felixstowe & North West (Trafford Park) 162.3 399.5 0.41 Felixstowe & Scotland (Mossend) 149.7 666.0 0.22 Felixstowe & West Midlands (Hams Hall) 106.0 260.5 0.41 Felixstowe & Yorks & Humber (Wakefield) 124.7 332.8 0.37 Notes Marginal External Costs are net benefits from the removal of lorries from the roads. The HGV MECs shown are in 2030 and in 2010 prices. HGV MEC benefits comprise road congestion, air pollution, greenhouse gases, infrastructure, accidents, noise, offset by indirect tax costs. The above MECs also include an estimate of rail environmental costs - see Table 1 in Appendix 1 for details. HGV MECs for 2015 and 2035 were provided to NR by DfT in 2014. The data were adjusted by NR to take account of changes to the HGV (Artic) MECs between 2014 and May 2018. Data for intermediate years were interpolated, taking account of the growth trajectory used for other flows (the trajectory is not available for these flows). For post 2035 growth assumptions see Table 1 in Appendix 1. MECs cover A roads and motorways only; therefore total MECs per journey and total journey distance reflect these road types only. Routes were determined using Google Maps. Total mode shift benefits by flow / destination per annum (for 2030 for example) are shown in Table C.08. Note: the assumption of 33 lorries per train shown in Table C.08 is being reviewed. At the time of writing a marginal increase in this assumption is possible. Table C.08 Mode shift benefits (£ per annum) Option Flows between: 2030 Options Felixstowe & East Midlands (Kegworth) 1,064,000 S1 and S2 Felixstowe & North East (Teesport) 424,000 Felixstowe & North West (Trafford Park) 5,710,000 Felixstowe & Scotland (Mossend) 196,000 Felixstowe & West Midlands (Hams Hall) 2,978,000 Felixstowe & Yorks & Humber (Wakefield) 1,375,000 Total 11,747,000 Notes The year shown is for illustration only. The above benefits are in 2010 market prices and are undiscounted and rounded. They are based on the benefits shown in above tables. Mode shift benefits are estimated by multipying the number of lorries removed from roads per annum by the MEC benefit per journey (see above table). The number of trains per day is estimated by multiplying number of additional paths per day (see above table) by 85% - average path utilisation for intermodal. The number of lorries removed from the roads per annum is estimated by multiplying additional trains per day (tpd) (see above) by number of return lorry journeys removed from the roads per annum per tpd (estimated at 8580), and by a factor of 2 (since each return trip represents two single trips). The above number of return lorries removed from the roads per annum for each tpd is estimated by multiplying the number of lorries removed from the roads per train (estimated at 33), by the average number of days operated per year (260).

The PV of the freight benefits only are shown in Table C.09. These freight benefits are also included in the same rows in Table C.13, but here they are combined with passenger benefits (where relevant).

Table C.09: Freight benefits Option S1 Option S2 (Low End (High End Costs) Costs) £m PV £m PV Net benefits to consumers and private sector (plus tax impacts) Non user benefits - road decongestion 280 280 Non user benefits - noise, air quality, greenhouse gases & 82 82 accident benefits (including rail environmental costs) Indirect taxation impact on government -96 -96 sub-total (a) 267 249

Costs to government (broad transport budget) Non user benefits - road infrastructure cost changes -60 -60 sub-total (b) -60 459

Net benefits (a-b) 327 -210 Passenger benefits and TOC operating costs The scheme options are assumed to enable two additional train service outputs, both of which are franchise commitments:  An increase in the off-peak service frequency between Ely and Kings Lynn from 1 to 2 tph, by extending the second Kings Cross to Ely service to Kings Lynn.  An increase in the service frequency between Ipswich and Peterborough from 0.5 tph to 1 tph.

Of these two service changes, only the Ely to Kings Lynn one was found to provide net benefits over and above TOC operating costs. Therefore only this service output is addressed in this section. The net benefits of the extra Ipswich to Peterborough service – together with the extra Ely to Kings Lynn service and other potential new services in the area – are discussed in Appendix 2. The improvement in the Ely to Kings Lynn service increases revenue and benefits in a number of different ways:  Existing and new passengers benefit from a more regular train service  The improved train service encourages more people to travel, generating additional revenue. This will help offset the costs of the scheme.  Some of the generated new rail passengers would otherwise have used private car for their journeys. Avoiding the need for these journeys creates benefits for non-users of rail, including reductions in road congestion, carbon emissions, noise and road accidents.  Passengers switching from road to rail also has the negative effect of reducing indirect tax receipts to government.

The demand response and user benefits were assessed using the established rail industry demand forecasting tool MOIRA. The estimates of the annual effect of the

Kings Lynn to Ely service change, assuming 2018 demand levels, are set out below. The increase in passenger miles is used as the basis for calculating non-user benefits. The use of MOIRA1 was deemed to be suitable as crowding was not a major consideration since this is an off-peak only service. Table C.10: Estimated annual impact of Ely to Kings Lynn off-peak extension, based on 2018 demand levels Value of Revenue Increase time benefit generated in to users passenger (2018 (2010 Miles prices) market prices) Business £355,478 £111,165 534,627

Commuting £404,921 £209,201 1,395,929 Other £372,631 £506,101 2,755,563

For the full appraisal benefits these figures are grown to reflect forecast increases in passenger demand, adjusted to reflect changes in passengers’ valuations of their time, discounted and aggregated over the appraisal period. Passenger demand was assumed to growth in line with the WebTAG-approved demand forecasting framework. The inputs to this process were from the April 2018 DDG release from the DfT applied in the EDGE forecasting software. These rates are17  2.3% to 2.6% per annum from 2018 and 2035  1.7% per annum from 2035 to 2038  Growth in line with national population growth (c0.3% per annum) beyond 2038

The resultant total benefits in Present Value terms are summarised in the table below. They are also shown in Table C.13. The revenue benefits are all assumed to be transferred to government – see Table C.13.

Table C.11: Revenue and passenger benefits from Ely to Kings Lynn off- peak extension

Present Values over 60 years, discounted to 2010, 2010 prices. PV £m Rail user journey time benefits 52 Non user benefits - road decongestion 11

17 The results of a sensitivity test assuming higher growth rates is shown in Appendix 2.

Non user benefits - noise, air quality, greenhouse gases & accident benefits 2 Indirect taxation impact on government -6 Revenue 29 Total net benefits 87

TOC Operating costs. In order to operate the additional services the operator will incur additional operating costs. For the Ely to Kings Lynn off-peak extension the following assumptions were made:  Service to run as 4-car EMU in the off peak.  No additional sets are required to be leased as the rolling stock is assumed to be available from the peak.  3 additional drivers plus guard teams are assumed to be needed (i.e. 2 new shifts plus one spare).

Table C.12: Operating cost rates assumed for EMUs

4-car Stock Name Price base EMU EC4T Consumption (kWH per Vehicle Mile) 4.28 Maintenance (£ per vehicle mile) 2014 0.24 VTAC (£ per vehicle mile) 2014 0.07 Driver Employment Costs (£ per driver per annum) 2012 £50,000 Guard Employment Costs (£ per guard per annum) 2012 £35,000

The total TOC operating cost in PV terms is £25m. This cost is shown in Table C.13 and is assumed to be transferred to government. f) Benefits net of operating costs The benefits and revenues (£87m) minus the TOC operating costs (£25m) gives a net benefit of £62m. These benefits and costs are reflected in Table C.13. g) Level crossing benefits The appraisal does not currently include any road user or safety benefits (or disbenefits) associated with upgrading or closing any level crossings in the Ely area, as part of this scheme. This is because it is unclear at this stage which specific crossings will need to be upgraded or closed as part of this scheme (under Option S1 or S2), and which closure option (bridge / footbridge replacement or diversion or a combination of the two) is the preferred option at each site. Such benefits (or disbenefits) are likely to be small relative to the total costs and benefits of the scheme. This is based on analysis which is presented in Appendix 3.

In Appendix 3 it was assumed, for illustration only, that four crossings would need to be replaced with bridges or footbridges as part of this scheme (under Option S1 or S2). In this case it would result in the following benefits, in total (see Table 2 in Appendix 3 for further details):  PV £1m (rounded) in safety benefits: safety benefits as a result of reducing safety risks at these crossings; and  PV £3m (rounded) in road user benefits: benefits to road users (vehicles, pedestrians and /or cyclists) as a result of reduced queuing or waiting at the crossings. These benefits are all over 60 years, in line with the rest of this business case. Level crossing benefits will be reviewed as part of further business case work. Once specific closures / closure options etc are specified for each option, benefits and disbenefits will be included in the appraisal.

Appraisal results

The results of the appraisal under Options S1 and S2 are shown in Table C.13. Note: the costs and benefits in this table are totals over the 60 year appraisal period. They are all expressed in Present Value (PV) terms i.e. they are discounted to 2010 using the DfT’s social time preference rates – see Table 1 in Appendix 1 - and are in 2010 prices.

The capital costs consist of the initial capital costs (PV £363m to £456m) and renewal costs (PV £51m to £63m). Extra TOC operating costs are PV £25m.

The main benefits of the scheme are freight mode shift benefits – i.e. the social and environmental benefits of reducing the number of lorry journeys on the roads. These are shown in the table as non-user benefits. They are summarised in Table C.09 and included in Table C.13.

The secondary benefits are the benefits associated with additional passenger services. These are shown in Table C.11 and included in Table C.13.

Option S1 has a Benefit Cost Ratio (BCR) of 0.9. This represents poor value for money, using DfT criteria. The Net Present Value (NPV) is -£39m. Option S2 has a BCR of 0.7. This also represents poor value for money and the NPV is -£148m. The Transport Economic Efficiency (TEE) tables are included in Appendix 1. Although Table C.13 focusses on socio-economic costs and benefits, it addresses some costs and benefits which are relevant to the financial case. In particular, the capital costs, the operating costs and the road infrastructure cost savings.

Table C.13: Results of socio-economic appraisal Option S1 Option S2 (Low End (High End Costs) Costs) £m PV £m PV Net benefits to consumers and private sector (plus tax impacts) Rail user reliability benefits 0 0 Rail user journey time benefits 52 52 Journey ambiance inc. station amenity 0 0 Non user benefits - road decongestion 291 291 Non user benefits - noise, air quality, greenhouse gases & 84 84 accident benefits (including rail environmental costs) Rail user and non user disruption disbenefits during -14 -17 possessions Current TOC revenue benefits* 0 0 Current TOC operating costs** 0 0 Indirect taxation impact on government -102 -102 sub-total (a) 311 308

Costs to government (broad transport budget) Initial capital costs 363 456 Renewal costs 51 63 Non user benefits - road infrastructure cost changes -60 -60 Revenue transfer* -29 -29 NR operating costs and TOC operating costs transfer** 25 25 sub-total (b) 350 456

Net Present Value (NPV) (a-b) -39 -148 Benefit Cost Ratio to Government (BCR) (a/b) 0.9 0.7 Notes: *Total revenue benefits = revenue benefits to private sector 29 29 + revenue transfer to government **Total change in operating costs = change in operating costs to private sector + change in operating costs transfer 25 25 to government

Sensitivity analysis and risks

Table C.14 shows the results for a sensitivity test, SEN1, alongside the central case results (S1 and S2). Under SEN1 (for both options) freight benefits are reduced by 25%. This is to reflect the possibility that the freight benefits are lower than under the central case, either because of unanticipated capacity constraints or the forecasts being lower than projected or some other factor – see below. The BCRs fall to 0.7 and 0.5 respectively. In addition to this sensitivity test, Appendix 2 provides the results of a further sensitivity test. A high growth sensitivity test was undertaken using growth rates to/from Cambridge taken from the Cambridge Corridor “Aspirational growth” scenario. This compares with the growth rates used for the central case, which are summarised in Section C.03.04.

Table C.14: Results of sensitivity tests S1 SEN1 S2 SEN1

£m PV £m PV Net benefits to consumers and private sector (plus tax impacts) Rail user reliability benefits 0 0 Rail user journey time benefits 52 52 Journey ambiance inc. station amenity 0 0 Non user benefits - road decongestion 221 221 Non user benefits - noise, air quality, greenhouse gases & 64 64 accident benefits (including rail environmental costs) Rail user and non user disruption disbenefits during -14 -17 possessions Current TOC revenue benefits* 0 0 Current TOC operating costs** 0 0 Indirect taxation impact on government -78 -78 sub-total (a) 245 241

Costs to government (broad transport budget) Initial capital costs 363 456 Renewal costs 51 63 Non user benefits - road infrastructure cost changes -45 -45 Revenue transfer* -29 -29 NR operating costs and TOC operating costs transfer** 25 25 sub-total (b) 365 471

Net Present Value (NPV) (a-b) -121 -230 Benefit Cost Ratio to Government (BCR) (a/b) 0.7 0.5 Notes: *Total revenue benefits = revenue benefits to private sector 29 29 + revenue transfer to government **Total change in operating costs = change in operating costs to private sector + change in operating costs transfer 25 25 to government

Appraisal risks The main appraisal risks at this stage are as follows: The risk that capital costs increase above the figures shown in Table C.03. This risk is partly addressed by including optimism bias (of 64%) in the appraisal, although there is a possibility that costs will increase in excess of this percentage. Future versions of this business case will use revised cost estimates which are at a more advanced GRIP stage; this should reduce this risk.

The risk that the freight benefits in this appraisal do not materialise. This could be due (for example) to unanticipated capacity constraints on the F2N route which are not addressed in the capacity analysis work (see Section C.03.03), growth in total rail freight volumes to/from Felixstowe being lower than forecast and/or the mode shift benefits per lorry journey in Table C.07 being revised downwards. This risk is partly addressed through sensitivity analysis.

The risk that the freight benefits in this appraisal are either over or under-estimated because the number of paths under the base case is too high and/or the number of paths under the scheme options are too high, due to level crossing risks which are not fully addressed in this appraisal – see Section C.03.03. Similarly, level crossing risks could prevent the passenger benefits being realised.

The risk that running additional freight and passenger services in the Ely area will result in a deterioration in performance in the area and beyond. This will be addressed by performance analysis work by Network Rail over the next few months (see Section C.03.03).

Conclusions on economic case The main benefits of the scheme are the freight and passenger benefits as a result of running additional services. These benefits are compared with the capital and operating costs of the scheme over the 60 year appraisal period. Option S1 has a Benefit Cost Ratio (BCR) of 0.9. This represents poor value for money, using DfT criteria. The Net Present Value (NPV) is -£39m. Option S2 has a BCR of 0.7. This also represents poor value for money and the NPV is -£148m.

Financial Case

ADD PURPOSE

Order of Magnitude/ GRIP 1 Estimate The ‘Cost Range’ for this Cost Plan is based on using 50% probability level (‘P50’) and the 90% probability level (‘P90’). As there are multiple options, and in order to produce a cost range,we have proposes a maximum and minimum option. The maximum option which consists of Ely New Alignment option 4 (most expensive track option), Ely Station Area option ESA2 (single station option) and Level Crossing Option 3 Closure by road bridge (most expensive level crossing option) at P90. The minimum option which consists of Ely North Junction option ENJ1 (least expensive track option), Ely Station Area option ESA2 (single station option) and Level Crossings Option 2 – Closure by diversion (least expensive level crossing option) at P50. Hence, the Cost Range is from £600,000,000 (P50) to £870,000,000 (P90). The value for Investment Authority and Business Planning purposes is based on the 80% probability value (P80) and is £650,000,000 to £820,000,000. To establish this cost range Network Rail peer reviews have been conducted at programme, route and national levels to ensure that estimate is comparable with other schemes. Estimate GRIP 2 for SPO (NA5 and ESA2) Assumptions and exclusions for estimate List of comparison schemes/ examples/ benchmarks/ justification

E.02 Lifecycle Costing Life Cycle costing for the scheme has been establised using a recognised NR process, which at this early stage of development uses qualitative methods to assess a high, medium or low cost bracket for the an option or alternative. Th level of life cycle cost for each of the alternatives and therefore individual interventions will be used for short-listing the options between GRIP stages 2 and 3. This methodology is yet to establish some benchmarking data but is being rolled out (within NR) to assess whether it is can be used as an alternative for business case purposes. LCC for the scheme (MK/ IP) Periods of the LCC and justification for this against the economic case (renewal costs to be discussed here as part of the do-nothing option) How will the LCC information be used outside the business case?

Commercial Case

ADD PURPOSE

Commercial viability of the scheme The programme team has held a series of workshops with internal and external stakeholders to determine the criteria for the business case options. These are outlined in the graphic shown below.  MN to INSERT - Table of options, BCR, commercial and funding options, (WEI) The table below is indicative and will be updated for the OBC

The table indicates the number of interventions required for the scheme to deliver against its strategic objectives but also outlines the benefits (if any) should there be a series packages which can be delivered in incremental steps unitl the aspired capacity is reached. This section of the business case aims to address the question of afforability for a scheme as complex as EACE. An approach of smaller interventions is very likely to cost more and take longer to complete. This may be unacceptable to both statutory and non statutory stakeholders which have a vested interest in the scheme, in terms of the areas, social and economic sustaintability.

An approach which is aligned to smaller funding packages, is also more likely to complicate the consents and public consultation processes. It is likely that the assumptions outlined in the economic case for EACE SOBC are undeliverable (due to pre-longed timescales). However from an affrodability and political prospective it is clear that the EACE programme is to be delivered in small packages. . The packages which have been identified for the scheme as needing to be completed for the recommendation is therefore that all funding be provided for the development of the scheme at Decision to Design stage. As the scheme has already been funded for the RNEP stage Desion to Develop, funding from the DfT as part of this SOBC is not being sought.

Procurement Strategy The programme invited stakeholders and funders to assess the procurement options available for the scheme; the available procurement options for the scheme are

outlined in the table below, in the OBC it is envisaged that the each intervention will need to have developed its own procurement timetable, for now, the SOBC refresh has outlined the key principles that will be followed for the whole scheme:

Its recommended that the scheme will be competitively tendered. The cost of this is likely to be slightly higher than using the Network Rail CP6 Framework but as outlined in the table, this is primarily so that the scheme is not put at risk during its delivery with the renewal bank for CP6. This approach is also likely to give the overall programme, which includes a number of road interventions an apportuity to identify the correct main contractor.

With regards to road development and delivery, it is noted that Network Rail will not be leading on the delivery of any of the road schemes but would act as an agent to the DfT durng the works.

Outline the risks and timeline per option (against an overall time line for delivery)  Contract length scenarios IP need to complete this for each of the GRIP Stages inclusive of procurement timescales and actual development/ design timescales Indicative timescales for the end to end scheme are noted below in table XX, though they have also been mapped against the RNEP stages to provide an indication of when funding will be sought and for what stages: RNEP Indicative Development & Start of End of Cost of Decision Delivery Stages stage Stage the Stage points GRIP Stage 1 – Output 11-01-17 09-01-18 N/a Definition

GRIP Stage 2 – Pre-Feasibility 10-01-18 14-11-18 N/a (SOBC) Develop

Decision to GRIP Stage 3 – Option 04-01-19 25-06-20 IP Selection

GRIP Stage 4 – Single Option 27-03-20 13-04-22 IP Development

(OBC) GRIP Stage 5 – Detailed 04-03-22 06-12-23 IP

Decision to Design Decision to Design

GRIP Stage 6 – Implementation 13-09-23 02-12-25 FBC

GRIP Stage 7 – Project Hand 03-12-25 25-06-26 FBC (FBC) Deliver Deliver

Decision to Back

GRIP Stage 8 – Project Close 27-02-26 07-05-27 FBC Out

Accept Accept Decision to

It is envisaged that for EACE the funding will be sought for the programme per package. perhaps using a breakdown of business cases within the Decision to Design stage.

The current understanding (using GRIP 2 development work only), has indicated that these following packages/ locations are the key interventions required to deliver the overall benefits to the scheme. Further testing of this via capacity analysis work will continue to be developed to ensure that the sequence of delivery is optimal. Package 1 - Kiln Lane

Sub Package 1.1 - TBC Package 2 - Queen Adelaide road and rail scheme Sub Package 2.1 Road scheme Sub Package 2.2 Rail scheme Sub Package 2.3 Level Crossings Package 3 - Rail Sub package 3.1 station Sub Package 3 .2 bridges Package 4 - Level crossings Sub Package 4.1 Core level crossings (circa 23 LC's) Sub Package 4.2 Tranche 1 Outer crossings (circa 50 LC's) Sub Package 4.3 Tranche 2 Wider Ely crossings (circa 45 LC's) To illustrate the programe and how it is looking to proceed into GRIP 3 (only) as packages and projects, a diagram has been provided below:

Development of the economic case to cover the packaging design required.

Governance and Investment

a) Governance Current governance arrangements are outlined the management case. Project authority will be sought through Network Rails existing governance procedures. Develop this further to cover integration opportunities and express development in part b) below

The programme will be following Network Rails Governance arrangements for commercial management though it is recommended that the DfT hold the fund for the

scheme and apportion the funding across the road and rail components accordingly. Develop this further

b) 3rd Party or partnering governance arrangements Develop this further, see governance above

c) Alternative funding options Alternative funding sources are being sought as part of the business case development work. This is being carried out in partnership with the combined authority and LEP's. the funding streams which have been assessed are as follows: Develop further with CCC, CA and System operator

 National Productivity Infrastructure Fund

 Housing Infrastructure Fund

 Shared Prosperity Fund

 Growth Deal Funding

Management Case

ADD PURPOSE

Governance The Ely Area Capacity Enchancement (EACE) programme is structured to address the key areas of risk for the scheme but also the stakeholder enagagement focus which the programme needs. Below is the proposed programme structure for the scheme as it enters GRIP 3 and beyond:

EACE Governance Structure (GRIP 3 & beyond)

A key emphasis for the programme to deliver the value from the scheme benefits is in its management of risk either through requirement management and or MSP management principles. More of these methodologies are dicussed later in this section. In adition to this programmatic structure and its underlying risk management approach, the goverance in which the programme is sourcing its authority to proceed through GRIP and programme cycles is through Network Rail’s exsiting commercial and authority panels. The programme is currently authorised to proceed up to GRIP 3 and through this outline business case would request authority to proceed into GRIP 3 Option Selection for all of its packages plus some GRIP 4. It iscritical that timelenss

around the development of the scheme is maintained, Please see the commercial case for the further details on the procurement strategy. Governance structure for the programme is dependant on the NR governace as per the commercial case however, to ensure that stakeholders are kept informed of the development stages, an Ely Area Capacity Enhancement Programme Board has been initiated.

Overall risk exposure of the scheme. Outline the management approach to reduce or manage risk over the lifetime of the scheme (therefore generating better VfM) Outline any external governance arrangements which influence the scheme (Road/ Rail Scheme)

Assurance Plan The programme will follow Network Rails assurance standards, which align with P3M principles outlined by the Infrastructure Projects Authority (IPA) and therefore the DfT. Assurance in the scheme has been desined in levels and all the programme supporting information has been structured using this tiered format. In support of this, a number of peer reviews and stage gate assurance measures are in place for the scheme. Areas which are not performing are addressed in weekly progress sessions and where the outputs are not delivered adequately, the item or discussion area in question are escalated. Some ecalations have reached programme board, which includes the DfT and the Network Rails funding partners. Resolution to assurance concerns is sought through and subsequenly remedied by the Programme Sponsor and the Assurance Manager. The same levels of assurance, which are also named 'levels of defence', have been replicated in the programme risk management strategy. This ensures that assurance and risks are governed effectively through the programme structure. Further development of the joint assurance (with CCC/ CA) and governance procedures is required for the scheme. Align with Anglia Route portfolio objectives, which must align with DfT Discuss the Tender Vet process Discuss stakeholder assurance for road sobc discuss assurance process for the

Programme Dependencies The programme sponsor and project teams run and participate in a number of board, programme, project level dependency and interface management sessions. These are held periodically and form a basis for decisions being made, critical timescale overlaps and inefficiencies for the route. The programme dependencies are as follows: The Project or The dependency to Ely Active Management is: Programme and to the project or programme NEAT Programme Understanding of the 8 weekly meeting with the NEAT programmes programme and ongoing approach to line of route discussions between safety and risk sponsors. assessments, the ORR's acceptance of this Cambridge Re-signalling Understanding of when 8 weekly meeting with the scheme the Cambridge re- programme and ongoing signalling scheme (outer) discussions between will be able to utilise Ely sponsors. signalling scheme Sponsor discussions with sketches to ensure the Signalling RAM and other delivery strategies are sponsors in the area who effective and aligned will influence the signalling in the area. Cambridge South Station

A key dependency of the programme is the development and successful integration of the road scheme at the Queen Adelaide crossings. Management of this dependency through a series of activities and their associated costs is sought as part of this outline

business case. Initial integration activites and the uplift of resources have been indentified through stakeholder and DfT engagement. The outline of the integration along with the level of resource requirements would take approximate 3-6 months to develop and bring into mobilsation, see the illustration below.

The extent of integration is dependant on the commercial strategy for the programme. The package combinations of the following running in parallel (as a programme) to achieve opening day aspirations within CP7/ 8, further consideration of this is detailed in the commercial case: Package 1 - Kiln Lane Sub Package 1.1 - TBC Package 2 - Queen Adelaide road and rail scheme Sub Package 2.1 Road scheme Sub Package 2.2 Rail scheme Sub Package 2.3 Level Crossings Package 3 - Rail Sub package 3.1 station Sub Package 3 .2 bridges Package 4 - Level crossings Sub Package 4.1 Core level crossings (circa 23 LC's) Sub Package 4.2 Tranche 1 Outer crossings (circa 50 LC's) Sub Package 4.3 Tranche 2 Wider Ely crossings (circa 45 LC's) Develop further - outline the key interfaces (see startegic case original) Outline the dependencies How is each dependency being managed

Stakeholder Management and Communication

a) Stakeholder Engagement Stakeholder engagement for the scheme has been ongoing with the funders as well as internal Network Rail and operator forums. A stakeholder management plan has been developed by Network Rail to support the delivery of the schemes overall objectives but also its risks (as a conseuqence of the stakeholders involved). The key objectives for the scheme are outlined below. In development Stakeholder enagagement has consisted of the following:  Network Rail Sponsor led meetings with Cambridgeshire County Council, LEP's, Ely Task Force,  Network Rail Infrastructure Projects led route enagagement meetings  Ely Task Force meetings attended by the Network Rail Sponsor  On going dialogue with DfT though periodic Anglia Programme Boards  On going engagement with the Strategic Freigh Network Programme Board  Local engagement with the Cambridgeshire and Peterborough Combined Authority plus the local countil, Cambridgeshire County Council.

b) Communication Plan Through the engagements with the stakeholders, agreement has been reached that public consultation and external engagement is a key factor for the success of this scheme. Therefore, Network Rail with the stakeholders (namely the Task Force representatives) have developed a highlevel communication plan for consultations and public engagements. The illustration below, provides a snapshot of the current (GRIP 2) status. Dependant on the outcome from DfT, against RNEP and the decision to design, this current view will require further development.

Appendix 1 Appraisal Assumptions

This appendix includes the following further information on the economic appraisal:

 Table 1, further information on appraisal assumptions.

 Transport Economic Efficiency (TEE) tables for Options S1 and S2.

Appraisal Summary Tables (AST) for Options S1 and S2 are available on request.

Table 1: Further appraisal assumptions Assumptions apply to central case unless stated. Further assumptions are in tables in main text. All years refer to financial years e.g. 2018 refers to 2018/19 F/Y. Assumption Value Source Comment General assumptions: Current year 2018 WebTAG Model base year 2018 WebTAG First year of benefits 2027 Project Team Benefits are phased in between 2027 and 2029. The first full year of benefits is 2029. One-third of benefits are assumed in 2027; two-thirds of benefits are assumed in 2028. Final year of benefits 2086 Project Team Appraisal period (years) 60 Project Team The maximum is 60 years under WebTAG Price base year 2010 WebTAG (Unit A1.1, Values converted from Para 2.6.3) model base year to price base year using GDP deflator Base year for discounting 2010 WebTAG (Unit A1.1, Para 2.7.6) Discount rate (Social Time Preference 3.5% for 30 years from WebTAG (May 2018 Rate) the current year, 3.0% databook, Table for the next 45 years and A1.1.1) & HM 2.5% thereafter. Treasury Green Book Unit of account Market prices WebTAG (Unit A1.1, 19% added to convert Para 2.5.2) factor prices to market prices Capital and operating cost assumptions: Changes in capital costs in real terms Not applied (except for during appraisal period increases in RPI relative to GDP deflator) Optimism bias for: Capital costs 64% at GRIP stage 1 Optimism bias is not applied to cost savings Operating costs 41% at GRIP stage 1 Optimism bias is not applied to cost savings MEC congestion benefits These allocations are also Proportion allocated to work time 50% DfT applied to disruption Proportion allocated to commuting 25% DfT disbenefits Proportion allocated to other 25% DfT

Table 1: Appraisal assumptions (continued) Freight benefit-related assumptions HGV MEC growth rates after 2035 Accidents Values at GDP per capita DfT growth, quantities at no change Noise Values at GDP per capita DfT growth, quantities at no change Pollution Values at GDP per capita DfT growth, quantities at no change Climate change Values in line with central WebTAG (May 2018 The same price applies to projection for price of databook, Table A3.4) traded and non-traded carbon, quantities at no price of carbon change Infrastructure costs No change in values or DfT quantities Road congestion Values at GDP per capita DfT growth, quantities at no change Indirect taxation Values at GDP per capita DfT growth, quantities at no change Rail environmental costs as % of road 33% This is a conservative estimate of the relationship environmental costs (i.e. HGV MECs between rail and road environmental costs. For for noise, pollution and greenhouse carbon emissions, for example, rail emissions are gases) estimated at 24% of road emissions per tonne km (source: "Value and importance of rail freight", NR, 2010). The same proportion is applied throughout the appraisal period. Other assumptions Disruption during construction: Schedule 4 costs as a proportion of 5% Economic Analysis investment cost Team assumption (TBC) User disbenefits as a proportion of 100% Economic Analysis User & non-user benefits revenue disbenefits (i.e. Schedule 4) Team assumption are increased to allow for Non user disbenefits as a proportion 25% Economic Analysis factor to market price of revenue disbenefits Team assumption adjustment.

TEE tables - Ely area capacity enhancements (EACE) Option S2 (High End Costs) Table 1: Economic Efficiency of Transport System (All costs & disbenefits are negative, all benefits & savings are positive) Rail infra- Total in 2010 Cars, LGVs & structure - Rail passengers, price base £ goods vehicles Bus & Coach Rail Total Network Rail TOCs Non-business commuting benefits Travel time saving 91,233,638 72,760,759 18,472,879 18,472,879 Vehicle operating costs 0 0 User charges 0 0 During construction & maintenance -4,344,966 -868,993 -3,475,973 -3,475,973 Net (1a) 86,888,672 71,891,766 0 14,996,906 0 14,996,906 Non-business other benefits Travel time saving 89,760,510 72,760,759 16,999,751 16,999,751 Vehicle operating costs 0 0 User charges 0 0 During construction & maintenance -4,344,966 -868,993 -3,475,973 -3,475,973 Net (1b) 85,415,544 71,891,766 0 13,523,778 0 13,523,778 Business benefits Business user benefits Travel time saving 161,738,761 145,521,519 16,217,242 16,217,242 Vehicle operating costs 0 0 User charges 0 0 During construction & maintenance -8,689,933 -1,737,987 -6,951,946 -6,951,946 Net (2) 153,048,828 143,783,532 0 9,265,296 0 9,265,296 Private sector provider impacts Revenue 28,750,199 28,750,199 28,750,199 Opcost -25,298,287 -25,298,287 -25,298,287 Private sector contribution to investment cost 0 0 0 Revenue transfer (100% to government) -28,750,199 -28,750,199 -28,750,199 Opcost transfer from TOCs (100% to government) 25,298,287 25,298,287 25,298,287 Sub total (3) 0 0000 0 Other business impacts Developer contribution (4) 0 0 Net business impact (5 = 2+3) 153,048,828 143,783,532 0 9,265,296 Total, PV of transport econ eff. benefits (6 = 1a+1b+5) 325,353,044 1(a), 1(b) and (5) flow into the AMCB table, not (6)

Table 2 Public Accounts (costs should be recorded as a positive number, surpluses as a negative one) All Modes Road Total Infrastructure Bus & Coach Rail Local Government funding Revenue 0 Operating costs 0 Investment costs 0 Grant/subsidy: Public funds - local government (b) 0 0 Revenue transfer 0 Net (7) 0 000 General Government funding: transport Revenue 0 NR operating costs 0 0 Investment costs (a) 519,462,948 519,462,948 Grant/subsidy: Public funds - local government (b) 0 0 Developer contribution to investment cost(c) 0 0 Private sector contribution to investment cost (d) 0 0 Net investment costs to central govt (= a-b-c-d) 519,462,948 519,462,948 Revenue transfer (100% to government) -28,750,199 -28,750,199 Opcost transfer from TOCs (100% to government) 25,298,287 25,298,287 Infrastructure cost savings -60,140,546 -60,140,546 Net (8) 455,870,489 0 0 516,011,036 General Government funding: non-transport Indirect Tax Revenues (9) 101,786,781 101,786,781 0 Totals Broad transport budget (10=7+8) 455,870,489 * These costs exclude developer contributions Wider public finances (11=9) 101,786,781

Table 3: Analysis of Monetised Costs and Benefits (AMCB) Noise 31,140,743 Local air quality 510,715 Greenhouse gases 57,034,491 Rail environmental costs -29,046,517 Journey ambience (inc. station amenity and crowding 0 Accidents (incl. safety) 24,474,205 Consumer users (sub-total 1a+1b, Table 1) 172,304,216 Business users and providers (sub-total 5, Table 1) 153,048,828 Reliability (including performance) 0 Option values 0 Wider public finances (indirect taxation revenues) (sub-total -101,786,781 Sign changed from Table 2 11) PV of Benefits (a = sum of all benefits) 307,679,900 Broad transport budget (sub-total 10) 455,870,489 From Table 2 PV of Costs (b = 10) 455,870,489 Overall impacts NPV (a-b) -148,190,590 BCR (a/b) 0.67

Appendix 2: Further passenger service economic analysis

An assessment has been undertaken as part of the Economic Case development to estimate the revenues and benefits net of operating costs of a number of potential additional service options. Only the benefits of one of these options – the Ely to Kings Lynn off peak extension – has been included in the Economic Case (see Section C.03.04). The results for all five options are summarised within this appendix. The do-minimum assumption is the current train service. The five service options analysed were as follows:

Table 1: Passenger service changes considered

Option Service Rolling Power No. Service change stock type

1 Increase from 1 4-car 755 Bi-mode Norwich - Cambridge to 2 tph 2 2-car 158 Diesel (As Increase from 1 Nottingham – Norwich to 2 tph today)

3 Peterborough - From 2 hourly to 4-car 755 Bi-mode Ipswich hourly. 4 Extension of Ely 4 car 387 EMU London Kings X. Increase from Kings Lynn - Ely 1tph to 2ph Off Peak 5 Extension of a 12 car EMU peak Cambridge 700 to Brighton. 1 tph Ely - Cambridge in each high peak hour only.

Of these five, the first four options were about delivering improved connectivity by increasing the service frequency. The exception is the Cambridge to Ely peak extension which is about crowding relief as well as improved connectivity.

In all cases the quantified benefits of the options include:  Existing and new passengers benefit from having a more regular and, in the case of Ely Cambridge, a less crowded train service  The improved train service encourages more people to travel, generating additional revenue. This will help offset the costs of the scheme.  Some of the new rail passengers would have otherwise used private car for their journeys. Avoiding the need for these journeys creates benefits

for non-users of rail including reductions in road congestion, carbon emissions, noise and road accidents.

The connectivity benefits for options 1 to 4 were assessed using MOIRA which models the demand impact of connectivity improvement. Option 5 is modelled using MOIRA 2 which models the effects of both improved connectivity and reductions in levels of crowding. Demand is grown in line with WebTAG approved growth assumptions over the 60 year appraisal period. The demand forecast was producing using the EDGE software and DDG inputs (population, employment etc.) from the April 2018 release. In order to operate the services the operator will need to incur additional train mileage related costs such as fuel and maintenance, additional train crew costs or in some cases additional rain sets need to be leased. The additional train mileage, sets leased and train crew teams for each option is summarised below. For option 5, two scenarios are considered, scenario 5a in which no extra sets are needed and scenario 5b in which one extra set needs to be leased. If this option were to be progressed further investigation would be required to clarify which of these is appropriate.

Table 2: Assumptions on additional train mileage, set leasing and additional train crew Opt 5b Opt3 Opt4 Opt 5a CBGEL Opt1 Opt2 PBOI KLNE CBGEL Y Incl NRWCB NOTNRW PS 4- LY 4- Y No Leasin G 4 Car 2 car car car Leasing g 4-car Assumed train length 4-car Bi- 2-car Bi- 4-car 12-car 12-car and power type. mode DMU mode EMU EMU EMU Daily train mileage 2,408 4,180 1,431 700 59 59

Additional sets 3 7 2 0 0 1 Train Crew (Driver + guard teams) 9 21 6 3 0.25 3

The assumptions on the charge out rates are summarised in the table below:

Table 3: Assumptions on cost rates 2-car 4-car Bi- Stock Name Price base DMU 4-car EMU mode Leasing Cost (£ per vehicle per Bi-mode: 2018 annum) Others: 2014 £120,000 £112,800 £144,000 Diesel Consumption (Litres per Use EMU Vehicle Mile) 0.45 0 rates for

EC4T Consumption (kWH per electric Vehicle Mile) 0 4.28 mileage, and Maintenance (£ per vehicle mile) 2014 0.45 0.24 DMU rates VTAC (£ per vehicle mile) 2014 0.05 0.07 for diesel Vehicle spare cover ratio 1.14 1.14 mileage. Driver Employment Costs (£ per driver per annum) 2012 £50,000 £50,000 £50,000 Guard Employment Costs (£ per guard per annum) £35,000 £35,000 £35,000

For each option the benefits and revenue less the operating costs is calculated for each year of the appraisal period. These figures are discounted and aggregated.in line with WebTAG appraisal guidance. A summary of comparison of these costs and benefits are shown in the chart below. The blue bars show revenue plus benefits, the red bar shoes the operating costs with the green bar showing the difference between these – ie revenue plus benefits minus costs. This is called the Net Present Value (NPV) of the options. Only Kings Lynn to Ely and Cambridge Ely Option 5a show any significant net benefit (NPV), Nottingham to Norwich shows a very small positive NPV. The other options all show a net dis- benefit. Given the overall appraisal results presented above, the addition of some of these passenger services to the appraisal would have a limited impact on the BCR. Furthermore, there could be additional infrastructure requirements at other locations that would be required in order to facilitate such an additional services and the potential performance impacts of adding train services have not been assessed. The conclusion of this analysis therefore was that the only service likely for which a clear economic case was found was the Ely-Kings Lynn off peak frequency enhancement which has been included in the main appraisal results. The increase in the service frequency of the Peterborough to Ipswich service, a franchise commitment, has a slightly negative NPV and the inclusion of this service in the appraisal would have very limited impact on the overall BCR (unchanged to 1 decimal place). Figure 1

The results are shown in more detail in the table below.

Table 4: Results of socio-economic Opt1 Opt2 Opt3 Opt4 Opt 5a Opt 5b appraisal (2010 Prices and values) NRWCBG NOTNRW PBOIPS KLNELY CBGELY CBGELY 4 Car 2 car 4-car 8-car No Including Leasing Leasing £m PV £m PV £m PV £m PV £m PV £m PV Net benefits to consumers and private sector (plus tax impacts) Rail user journey time benefits 55.1 94.4 43.6 51.7 9.9 9.8 Non user benefits - road decongestion 16.4 19.3 8.7 10.7 3.8 3.8 Non user benefits - noise, air quality, -5.1 -5.7 -3.6 2.2 0.8 0.8 greenhouse gases & accident benefits Indirect taxation impact on government -5.4 -7.8 -3.6 -6.2 -1.0 -1.0 sub-total (a) 61.0 100.3 45.1 58.4 13.4 13.4

Costs to government (broad transport budget) Non user benefits - road infrastructure -0.1 -0.2 -0.1 -0.1 0.0 0.0 cost changes Revenue transfer* -34.4 -50.4 -24.9 -28.8 -3.3 -3.2 NR operating costs and TOC operating 119.0 147.1 75.1 25.3 5.6 48.0 costs transfer** sub-total (b) 84.4 96.5 50.1 -3.5 2.3 44.7

Net Present Value (NPV) (a-b) -23.5 3.7 -5.0 61.9 11.1 -31.3 Benefit Cost Ratio to Government financially (BCR) (a/b) 0.7 1.0 0.9 positive 5.8 0.3

Cambridge Corridors sensitivity test.

A sensitivity test was undertaken for options 1 to 4 using the Cambridge Corridors “aspirational growth” assumptions for flows to and from Cambridge. These growth rates assumed were as follows:

Table 5: Cambridge Corridors Aspirational Growth Flows Growth Cambridge to/from stations to 4.50% Kings Lynn Cambridge to/from stations to 2.90% Peterborough Cambridge to/from stations to 4.80% Norwich

These were assumed to be sustained over 20 years which is a highly optimistic assumption. Results of these sensitivity test are summarised below.

As might be expected those services which have a significant amount of demand to/from Cambridge: Norwich to Cambridge and Ely to Kings Lynn; are significantly improved by this assumption. The NPVs are improved by around £40m each over the appraisal period. The other services show far less improvement as far fewer passengers are destined for or originate from Cambridge.

Table 6: Results of Cambridge corridors Opt1 Opt2 Opt3 Opt4 sensitivity test NRWCBG NOTNRW PBOIPS KLNELY 4 Car 2 car 4-car 4-car

£m PV £m PV £m PV £m PV Net benefits to consumers and private sector (plus tax impacts) Rail user journey time benefits 78.0 96.7 43.9 73.2 Non user benefits - road decongestion 23.3 19.7 8.7 15.2 Non user benefits - noise, air quality, -3.7 -5.6 -3.6 3.1 greenhouse gases & accident benefits Indirect taxation impact on government -8.8 -8.0 -3.6 -8.7 sub-total (a) 88.9 102.9 45.3 82.8

Costs to government (broad transport budget)

Non user benefits - road infrastructure cost -0.2 -0.2 -0.1 -0.1 changes Revenue transfer* -48.2 -51.6 -25.1 -40.4 NR operating costs and TOC operating 119.0 147.1 75.1 25.3 costs transfer** sub-total (b) 70.5 95.4 50.0 -15.2

Net Present Value (NPV) (a-b) 18.4 7.5 -4.6 98.0 Benefit Cost Ratio to Government (BCR) financially (a/b) 1.3 1.1 0.9 positive

Appendix 3 - Economic analysis of level crossings

Introduction This appendix provides a summary of the interim report on the socio-economic benefits of closing Ely Core (Spine) level crossings, which was issued in November 2018. The interim report is available from the Economic Analysis team. The interim report assesses the socio-economic benefits associated with closing four level crossings in the Ely area (Kiln Lane, Second Drove, Chettisham and Adelaide) and replacing them with bridges. These crossings are being considered for closure (with bridge replacement) as part of the Ely area capacity scheme, specifically the Ely Core (Spine) part of this scheme. The Ely Core (Spine) part of the scheme is considering the closure and bridge replacement of six crossings in total but this report only addresses these four crossings since the others (the Queen Adelaide King’s Lynn and Norwich crossings) are being addressed by Cambridgeshire County Council. The Ely Core (Spine) part of the scheme is also considering the closure and diversion option for some crossings but this interim report does not address the benefits of these closures, since details of the diversionary route(s) for each crossing are not currently available. Similarly, the report does not analyse the costs of the proposed bridges, since cost estimates are not currently available. Once details of the diversionary routes and costs are available, these elements will be included in future versions of the economic analysis. The socio-economic benefits addressed by this report will contribute to the Strategic Outline Business Case (SOBC) and/or Outline Business Case (OBC) for the Ely area capacity scheme. The exact form of this contribution is to be determined. The analysis covers the following types of benefit at each crossing:  Safety benefits as a result of crossing closure;  User delay benefits as a result of crossing closure (i.e. reduced journey times for crossing users – road vehicles, cyclists and pedestrians).

The RSSB’s AXIAT (Assessment of Crossing Alternatives Tool) model was used to estimate the benefits. The AXIAT model is consistent with the DfT’s WebTAG appraisal guidance.

Scheme options and the Base Case / Do-Minimum This report only addresses the option of closure with bridge replacement at the four crossings. This option is amongst the high-level options being considered for each of these crossings. Detailed feasibility work at these sites has not yet been carried out. This feasibility work may indicate that other options (such as diversion options) are preferable to bridge replacement at these sites.

This option (closure with bridge replacement) is assessed relative the Base Case / Do- Minimum. For the estimation of safety benefits, the Base Case does not take account of projected increases in road traffic and/or train numbers (and hence risk). The details are discussed in the appendices. For the estimation of user delay benefits, the Base Case takes account of forecast increases in road traffic but not projected increases in train numbers, in line with AXIAT. This is to avoid the over-estimation of road user delay benefits, given the limitations of the model. This is discussed further below.

Methodology and results The table below shows some key information for the four level crossings included in the analysis.

Table 1: Key information and assumptions for each level crossing Level crossing name Kiln Lane Second Chettisham Adelaide Total Drove^ Location: miles 71 72 73 72 N/A chains 33 55 55 71 N/A Location description Between Ely & Between Ely & Between Ely & Between Ely Peterborough Peterborough Peterborough and King's N/A Lynn Type(s) of crossing AHB & FP FP^ MCB-OD FP N/A Safety risk reduction from 0.02843 0.00006 0.00193 0.00003 0.03045 closure (FWI) Vehicles per weekday 186 0 3570 03756 Cyclists per weekday 6 0 0 06 Pedestrians per weekday 229 1 113 1 344 Total users per weekday 421 1 3683 1 4106 Vehicles per weekend day 61***N/A Cyclists per weekend day 29***N/A Pedestrians per weekend 426 * * * N/A day Total users per weekend 516 ***N/A day Crossing closures per 212 113 113 55 N/A weekday Crossing closures per 116 35 35 40 N/A weekend day Average crossing closure 68 75 165 56 N/A time (secs) Length of diversionary route 0.0 0.0 0.0 0.0 N/A (km) ^ This report assesses the benefits of closing the Second Drove foot crossing only. The Second Drove AHB crossing is nearby (75m 58 ch) but the report does not address the benefits of closing this crossing. * AXIAT estimates weekend data based on weekday data and the model's default assumptions.

The key information and assumptions used for the analysis are as follows. Location miles/chains. From ALCRM file (ALCRM Change.xls) from Project Team.

Type of crossing. AHB: Automatic Half Barrier. FP: footpath crossing. MCB-OD: Manually Controlled Barrier with Obstacle Detection. Safety risk reduction in terms of FWI (Fatality and Weighted Injuries index). From ALCRM file (ALCRM Change.xls), if available. The number of road vehicles, cyclists and pedestrians using the crossing per weekday and per weekend day. Data are based on 9-day survey (census) data for the crossing, if available. Number of crossing closures per day (and per hour). Data are based on 9-day survey (crossing closure analysis) for the crossing, if available. Average crossing closure times. Data are based on 9-day survey (crossing closure analysis) for the crossing, if available. Length of diversionary route. In this context, for bridge replacement schemes, this distance is the extra distance (or reduced distance) for users, as a result of the bridge being at a different location from the existing crossing. For the crossings in this report, no extra (or reduced) distances are assumed. As a result of further development of the schemes, there may be extra (or reduced) distances for some of the crossings, which will be incorporated in future analysis. Results Results are shown in Table 2. They are all in Present Value (PV terms) i.e. discounted to 2010. The appraisal period is 60 years. Benefits are assumed to start in 2027. All benefits or cost savings or revenues are shown as positive figures; all costs or disbenefits are shown as negative figures.

Table 2: Scheme option and results for each level crossing Level crossing name Kiln Lane Second Chettisham Adelaide Total Drove^ Scheme option appraised Footbridge and Footbridge Road bridge Footbridge road bridge Benefits / costs over 60 years (PV £m): User delay benefits from 0.08 0.0001 2.76 0.00002 2.84 crossing closure User delay benefits from 0.00 0.00 0.00 0.00 0.00 diversionary route User operating costs from 0.00 0.00 0.00 0.00 0.00 diversionary route Tax costs associated with 0.00 0.00 0.00 0.00 0.00 user operating costs Safety benefits from 1.24 0.0025 0.08 0.0011 1.33 crossing closure Safety benefits from 0.00 0.00 0.00 0.00 0.00 diversionary route Total net benefits 1.32 0.0026 2.84 0.0012 4.16 ^ This report assesses the benefits of closing the Second Drove foot crossing only. The Second Drove AHB crossing is nearby (75m 58 ch) but the report does not address the benefits of closing this crossing. Note: all data are shown to 2 decimal places except where there are non-zero benefits of less than PV 0.01m. "0.00" therefore denotes zero.

The benefits are discussed in turn. User delay benefits from crossing closure. These are the benefits of reduced journey times for crossing users, as a result of the avoidance of queuing (for vehicles) or waiting (for cyclists and pedestrians). These benefits are estimated by AXIAT, based on the number of crossing users, crossing closure times and the number of crossing closures. As noted above, these user delay benefits do not take account of projected increases in train numbers during the appraisal period. This factor would suggest that the model is under-estimating the benefits of crossing closure. On the other hand, other factors might suggest that the benefits are over-estimated: the model does not address the possibility that traffic growth will result in vehicles using alternative routes to avoid increased queuing; also it does not address the possibility that the construction of a bridge will result in the transfer of some queuing / delay from the crossing site to nearby junctions. Taken together, these factors would suggest that it is unclear whether the model is under or over-estimating the benefits. These factors reflect the limitations of the model. User delay benefits (or disbenefits) from diversionary route. As discussed above, these benefits (or disbenefits) do not apply for these crossings. User operating costs (or cost savings) from diversionary route. These costs (or cost savings) do not apply for these crossings. Tax costs (or additional revenues) associated with above user operating costs. These costs (revenues) do not apply for these crossings.

Safety benefits from crossing closure. These are benefits (or disbenefits) due to the scheme option resulting in a reduction of risk at the crossing. They reflect the reduction in crossing risk (see above) and the Value of Preventing a Fatality. Safety benefits (or disbenefits) from diversionary route. These benefits (or disbenefits) do not apply for these crossings. Total net benefits. Total net benefits are estimated at PV £4m (rounded) over the 60 year appraisal period. This figure is shown in the last row of Table 2. Most of the net benefits relate to user delay benefits as a result of closing Chettisham (PV £2.8m). This reflects the relatively high number of users at this crossing (see Table 1). Safety benefits as a result of closing Kiln Lane (PV £1.2m) are also significant. This reflects the relatively high safety risks associated with the AHB at this location, compared with the MCB-OD and foot crossings at the other locations.